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SMEs in Africa - is capitalism really dead?

Written by: Dr. Rob Smorfitt

Article Overview: A number of people have said capitalism has failed. Has it really?

SMEs in Africa - is capitalism really dead?

SMEs in Africa depend on the ongoing capitalist approach. However, in the light of the financial crisis gripping the world, a number of Africans have claimed that capitalism is dead, and should now be buried. Is this a correct and fair assessment?

Firstly, the question must be asked as to whether capitalism is at fault and the root cause of the financial crisis. The one school of thought is that capitalism is not at fault, but rather that the fault lies with governments, who failed to provide sufficient regulation. I tend to agree withthis approach. The USA banks were not properly regulated which allowed banks to get themselves into this position. Proof of this is the fact that due to high levels of regulation in South Africa our banks did not get as badly burnt as those overseas did. So are banks guilt-free? No.

Banking management are guilty of being too greedy, of that there is no doubt. They are also guilty in some cases of unethical practices. But are they any different to the despots who rule in parts of Africa. Is there any difference bvetween Mugabe and Gono who raid the private bank accounts of business and individuals for foreign exchange, and these bank managers?No. They are both as despicable as the other. They are both unethical.

I think this is a clear case of throwing the bathwater out with the baby. I think it is up to governments to regulate the banks to force them to comply, just as they do with doctors, lawyers, accountants and engineers for example. This is essentially to protect the country's citizens more than anything else, but the government has this responsibility.

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Article Tags: Africa, capitalism, capitalism has failed, communism, entrepreneur, entrepreneurship, SME, SMME, Smorfitt, socialism, South Africa



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