Current Date:

Sunday, 22 October 2017
 

SWEG Conference on Economic Reforms (1)

Sudan has experienced with all types of universally recognized economic and social norms and doctrines since Independence in 1956

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The SWEG (Sudanese Women Economist Group) in cooperation with the German Friedrich Ebert Foundation have organized two workshops and one forum in preparation for a Conference to come out with recommendations for structural reforms to address the grave challenges facing the Sudanese economy since Independence in 1956. These activities were organized in cooperation with the German Friedrich Ebert Foundation.  Very important papers were presented by reputable experts followed by very constructive discussions by the participants.

Economic Systems

The first paper of six was presented by Prof. Atta El-Battahani (Economic and Social Doctrines and Doctrines and Regimes: Sudan Model).
The paper pointed to that since Independence in 1956, Sudan have experienced with all types of universally recognized economic and social norms and doctrines. Despite these rich experiences and experiments the end result and out-comes according to internationally recognized indicators was very negative and didn’t meet the people expectations and aspirations after the 1956 Independence. And in the last two decades the economic and social conditions and quality of life took a steep down curve. So, the question is “ What went wrong?” and “ What are the opportunities for addressing the situation”.
This requires a brief look at universally agreed upon definitions of  the three main economic concepts adapted.

Capitalism
 
Capitalism is an economic system and an ideology based on private ownership of the means of production and their operation for profit.[1][2][3] Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets. In a capitalist market economy, decision-making and investment are determined by the owners of the factors of production in financial and capital markets, and prices and the distribution of goods are mainly determined by competition in the market.
Economists, political economists, and historians have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire or free market capitalism, welfare capitalism, and state capitalism. Different forms of capitalism feature varying degrees of free markets, public ownership,[8] obstacles to free competition, and state-sanctioned social policies. The degree of competition in markets, the role of intervention and regulation, and the scope of state ownership vary across different models of capitalism;[9] the extent to which different markets are free, as well as the rules defining private property, are matters of politics and policy. Most existing capitalist economies are mixed economies, which combine elements of free markets with state intervention, and in some cases economic planning.
Market economies have existed under many forms of government, in many different times, places, and cultures. The development of capitalist societies, however, marked by a universalization of money-based social relations, a consistently large and system-wide class of workers who must work for wages, and a capitalist class which dominates control of wealth and political power, developed in Western Europe in a process that led to the Industrial Revolution. Capitalist systems with varying degrees of direct government intervention have since become dominant in the Western world and continue to spread.
Capitalism has been criticized for establishing power in the hands of a minority capitalist class that exists through the exploitation of a working class majority; for prioritizing profit over social good, natural resources, and the environment; and for being an engine of inequality and economic instabilities. Supporters believe that it provides better products through competition, creates strong economic growth, yields productivity and prosperity that greatly benefits society, as well as being the most efficient system known for allocation of resources

Socialism

Socialist economics refers to the economic theories, practices, and norms of hypothetical and existing socialist economic systems.
A socialist economic system is characterised by social ownership and democratic control of the means of production, which may mean autonomous cooperatives or direct public ownership; wherein production is carried out directly for use. Where markets are utilized for allocating inputs and capital goods among economic units, the designation market socialism is used. When planning is utilized, the economic system is designated a planned socialist economy. Non-market forms of socialism usually include a system of accounting based on calculation-in-kind or a direct measure of labor-time as a means to value resources and goods.
The term socialist economics may also be applied to analysis of former and existing economic systems that call themselves "socialist", such as the works of Hungarian economist Janos Kornai.
Socialist economics has been associated with different schools of economic thought. Marxian economics provided a foundation for socialism based on analysis of capitalism, while neoclassical economics and evolutionary economics provided comprehensive models of socialism. During the 20th century, proposals and models for both planned economies and market socialism were based heavily on neoclassical economics or a synthesis of neoclassical economics with Marxian or institutional economics.

 Karl Marx and Friedrich Engels believed that hunter-gatherer societies and some primitive agricultural societies were communal, and called this primitive communism. Engels wrote about this at length in the book The Origin of the Family, Private Property and the State, which was based on the unpublished notes of Marx on the work of Lewis Henry Morgan.
Values of socialism have roots in pre-capitalist institutions such as the religious communes, reciprocal obligations, and communal charity of Mediaeval Europe, the development of its economic theory primarily reflects and responds to the monumental changes brought about by the dissolution of feudalism and the emergence of specifically capitalist social relations. As such it is commonly regarded as a movement belonging to the modern era. Many socialists have considered their advocacy as the preservation and extension of the radical humanist ideas expressed in Enlightenment doctrine such as Jean-Jacques Rousseau's Discourse on Inequality, Wilhelm von Humboldt's Limits of State Action, or Immanuel Kant's insistent defense of the French Revolution.
Capitalism appeared in mature form as a result of the problems raised when an industrial factory system requiring long-term investment and entailing corresponding risks was introduced into an internationalized commercial (mercantilist) framework. Historically speaking, the most pressing needs of this new system were an assured supply of the elements of industry – land, elaborate machinery, and labour – and these imperatives led to the commoditization of these elements.
According to influential socialist economic historian Karl Polanyi's classic account, the forceful transformation of land, money and especially labour into commodities to be allocated by an autonomous market mechanism was an alien and inhuman rupture of the pre-existing social fabric. Marx had viewed the process in a similar light, referring to it as part of the process of "primitive accumulation" whereby enough initial capital is amassed to begin capitalist production. The dislocation that Polyani and others describe triggered natural counter-movements in efforts to re-embed the economy in society. These counter-movements, that included, for example, the Luddite rebellions, are the incipient socialist movements. Over time such movements gave birth to or acquired an array of intellectual defenders who attempted to develop their ideas in theory.
As Polanyi noted, these counter-movements were mostly reactive and therefore not full-fledged socialist movements. Some demands went no further than a wish to mitigate the capitalist market's worst effects. Later, a full socialist program developed, arguing for systemic transformation. Its theorists believed that even if markets and private property could be tamed so as not to be excessively "exploitative", or crises could be effectively mitigated, capitalist social relations would remain significantly unjust and anti-democratic, suppressing universal human needs for fulfilling, empowering and creative work, diversity and solidarity.
Within this context socialism has undergone four periods: the first in the 19th century was a period of utopian visions (1780s-1850s); then occurred the rise of revolutionary socialist and Communist movements in the 19th century as the primary opposition to the rise of corporations and industrialization (1830–1916); the polarisation of socialism around the question of the Soviet Union, and adoption of socialist or social democratic policies in response (1916–1989); and the response of socialism in the neo-liberal era. As socialism developed, so did the socialist system of economics

Mixed economy

A mixed economy is defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or markets and economic interventionism. However, in most cases, "mixed economy" refers to market economies with strong regulatory oversight and governmental provision of public goods, although some mixed economies also feature a number of state-run enterprises.
In general, a mixed economy is characterized by a pragmatic division of the means of production between private ownership and public ownership. Profit-seeking enterprise and the accumulation of capital remain the fundamental driving force behind economic activity, while markets are subject to varying degrees of regulatory control. Unlike a free-market economy, the government wields indirect macroeconomic influence over the economy through fiscal and monetary policies designed to counteract capitalism's history of boom/bust cycles, unemployment, and growing income and wealth disparities, along with playing a role in interventions and civic institutions that promote social welfare. Subsequently, many mixed economies have expanded in scope to include a role for indicative economic planning and/or large public enterprise sectors. Development of the public sector in mixed economies has tended to concentrate across universal civic requirements, such as health services, mass transportation, physical infrastructure, and management of public lands and resources.
In reference to post-war Western and Northern European economic models, as championed by Christian democrats and social democrats, the mixed economy is defined as a form of capitalism where most industries are privately owned with only a minority of public utilities and essential services under public ownership. In the post-war era, European social democracy became associated with this economic model.
Economies ranging from the United States to Cuba have been catalogued as mixed economies. The term is also used to describe the economies of countries which are referred to as welfare states, such as the Nordic countries.  Governments in mixed economies often provide environmental protection, maintenance of employment standards, a standardized welfare system, and maintenance of competition.
As an economic ideal, mixed economies are supported by people of various political persuasions, typically centre-left and centre-right, such as social democrats or Christian Democrats. Supporters view mixed economies as a compromise between state socialism and free-market capitalism that is superior in net effect to either of those.

History

The term mixed economy arose in the context of political debate in the United Kingdom in the postwar period, although the set of policies later associated with the term had been advocated from at least the 1930s. Supporters of the mixed economy, including R. H. Tawney,  Anthony Crosland, and Andrew Shonfield were mostly associated with the British Labour Party, although similar views were expressed by Conservatives including Harold Macmillan. Critics of the mixed economy, including Ludwig von Mises and Friedrich von Hayek, argued that there can be no lasting middle ground between economic planning and a market economy, and any move in the direction of socialist planning is an unintentional move toward what Hilaire Bloc called "the servile state".

Philosophy

In the apolitical sense, the term "mixed economy" is used to describe economic systems which combine various elements of market economies and planned economies. As most political-economic ideologies are defined in an idealized sense, what is described rarely—if ever—exists in practice. Most would not consider it unreasonable to label an economy that, while not being a perfect representation, very closely resembles an ideal by applying the rubric that denominates that ideal. When a system in question, however, diverges to a significant extent from an idealized economic model or ideology, the task of identifying it can become problematic. Hence, the term "mixed economy" was coined. As it is unlikely that an economy will contain a perfectly even mix, mixed economies are usually noted as being skewed towards either private ownership or public ownership, toward capitalism or socialism, or toward a market economy or command economy in varying degrees.

Mixed socialist economies

The concept of a mixed economy is not exclusive to capitalist economies (economies structured upon capital accumulation and privately owned, profit-seeking enterprises), and the phrase has been used to characterize some socialist economic systems. A number of proposals for socialist systems call for a mixture of different forms of enterprise ownership. For example, Alec Nove's conception of feasible socialism provides an outline for an economic system based on a combination of state-enterprises for large industries, worker and consumer cooperatives, private enterprises for small-scale operations, and individually owned enterprises. The social democratic theorist Eduard Bernstein advocated a form of mixed economy, believing that a mixed system of public, cooperative, and private enterprise would be necessary for a long period of time before capitalism would evolve of its own accord into socialism.

Relation to forms of government and other ideas

The mixed economy is most commonly associated with social democratic policies or governments led by social democratic parties . However, given the broad range of economic systems that can be described by the term, most forms of government are consistent with some form of mixed economy. In contemporary uses, "social democracy" usually refers to a social corporatist arrangement and a welfare state in the context of a developed capitalist economy.
Authors John W. Houck and Oliver F. Williams of the University of Notre Dame have argued that Catholic social teaching naturally leads to a mixed economy in terms of policy. They referred back to Pope Paul VI's statement that government "should supply help to the members of the social body, but may never destroy or absorb them". They wrote that a socially just mixed economy involves labor, management, and the state working together through a pluralistic system that distributes economic power widely.