Congratulations To Robert Mugabe – Zimbabwe’s Unemployment Rate Now 95%

Source: Congratulations To Robert Mugabe – Zimbabwe’s Unemployment Rate Now 95% – Forbes

Much has been made of–not least by Donald Trump himself–Trump’s claim that here are 96 million American unemployed. We all keep repeating that there are 96 million not in a formal paid job which is a rather different thing but that doesn’t seem to be changing minds. However, at the other end of the economic totem pole, yes even further down than the disasters of Greece or Venezuela, there is Zimbabwe. Where, astonishingly, even the government itself thinks that the unemployment rate among the population is 95%.

This is not good economic management:

From 2011 to 2014, the percentage of Zimbabweans scrambling to make a living in the informal economy shot up to an astonishing 95 percent of the work force from 84 percent, according to the government. And of that small number of salaried workers, about half are employed by the government, including patronage beneficiaries with few real duties.

The informal economy means outside regulation, outside taxation, and most of the time outside any particular place or time either. It is, if we’re fair about it, the economy we had before we actually had a formal or organised economy at all. And the problem with such informality is that any sense of large scale organisation or cooperation is impossible. Which is something of a problem as it is the division and specialisation of labour which creates economic wealth and if no large scale organisation is possible across people then not much dividing and specialising is going to take place. Thus not much wealth will be created.

No one really has any accurate figures about what the GDP of Zimbabwe is these days but reasonable estimates put it down at $600 to $700 a year per capita. That’s pretty much the level at which all of peasant humanity from Ur of the Chaldees to the start of the Industrial Revolution in 1750. In fact, it’s poorer than England was at that start of the Industrial Revolution. Effectively, in the modern sense, Zimbabwe doesn’t actually have an economy any more.

So that’s something we can add to our economic checklist. Greece shows us not to have one monetary system over something larger than an optimal currency area. Venezuela tells us what happens when you destroy the price system and thus the market. A small hint here, everyone becomes much poorer. And Zimbabwe shows what happens when you confiscate all the productive assets from those who were being productive with them. In effect Zimbabwe has had a 100% inheritance tax with the tax revenue distributed to the President’s cronies. Which is indeed a bit of a warning to those who complain so much about inherited wealth, isn’t it?

COMMENTS

WORDPRESS: 6
  • comment-avatar
    Chatham House 6 months

    This is truly fantastic – this is a true legacy to be envious of when the 93 year old Old Fart, farts his last.

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    Morty Smith 6 months

    Mugabe is a “world leader” in all the wrong ways

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    Joe Cool 6 months

    I’d say this is quite an achievement – it’s not every country that gets a write-up in Forbes, for whatever reason. If you can’t be first, why not strive to be last.

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    tonyme 6 months

    Zimbabwe could be as rich and self-sustaining as some of the middle-eastern countries in deserts but have everything they need. With all the minerals and the educated people in the diaspora and within, Zimbabwe has a lot of resources to be placed among some of the wealthiest countries in the world. But what do we have> Because of poor leadership and a lack of vision, selfishness we have nothing to show. A president who spends more time abroad has no love for the country. Moreover, during the war he was out. Why should he stay now that things are so bad. By the way, without the US Dollar, how ids he managing to stay away for so long with all those crowds attending to him along the way?

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    Nyoni 6 months

    If the war was to replace a minority white patronage system well we now have a minority black patronage system . One and the same probably even worse.

    • comment-avatar
      jono 6 months

      Give me a break! Probably worse? In about 85 years the whites built a country. Towns, cities, roads, electricity, mines, schools, universities, factories, airstrips, lakes, dams, sophisticated agriculture etc etc. Blacks were gainfully employed in assisting this massive development. Can there be any doubt that the country would be mud huts and bush if the whites had not arrived? In something approaching half that time what has black rule achieved. Aha yes glorious independence. With blacks desperate to either get to RSA or Europe. Even Mugabe cannot stand to be in Zim. The tragedy is that whites did arrive. The country would have been far better off as it was. The population would only have been a few hundred thousand and at least the wildlife would have survived and land degradation been minimal. So sorry for that!