Globally, capitalism is fighting a losing battle – in parts of the Western world, the sharp practices of big businesses that led to global financial crises have made populism and democratic socialism attractive.

Here in Africa and many parts of Asia, crony capitalism holds sway, preventing smaller economic participants from breaking into the big leagues. Generally, the model of capitalism today ensures that big businesses who have the resources to buy political influence can always stay at the top, while the smaller businesses have to struggle for sunlight.

It works for them, but overall, it is failing all of us. With the rise of Artificial Intelligence and other disruptive technologies that threaten entire industries and jobs, it is necessary to rethink our economic models from the ground up.

We must generate new answers to the basic economic questions

  • What do we produce?
  • How do we produce
  • Who do we produce for?
  • How best do we allocate scarce resources?

This is why I propose the economic model of democratic capitalism. I have spent the past few weeks pondering on the recent economic happenings in Nigeria. The ban on milk importation, which was followed by the grant of exclusive licences to the biggest dairy products manufacturers, for the purpose of importing the same milk that was reportedly banned!

The ban on ride-sharing platforms like Gokada, Opay, followed by the promotion of state-controlled means of transportation in Lagos. The new levies imposed on Uber for operating in Nigeria. Several truths have struck home to me.

It is inefficient and unwise to allow Lagos remain the most economically important state in Nigeria. Intentional steps must be taken by private capital to invest in neighbouring states.

Every Nigerian, and indeed, all human beings, must have the right to use whatever resources within their power to generate income, and the state should not have the power to take it from them, except where doing so constitutes a crime of the highest proportions.

In this sense, activities like prostitution and marijuana production, which are of a personal nature, and cannot be considered serious crimes, should be legalised.

This is the essence of Democratic Capitalism – for the sake of this brief discussion, we can define it as an economic system where all economic actors, irrespective of size or resources, have equal economic influence; discourages concentration of economic power; and supports the autonomy of the individual to decide how to create wealth for himself.

It is possible that you might confuse democratic capitalism with libertarianism and that would be understandable. Both are offshoots of the capitalist system, both support the absolute autonomy of the individual, but they diverge on how economic actors should act in respect of concentration of economic power.

To illustrate, a libertarian would see nothing wrong with more people moving and preferring to do business in Lagos State, to the detriment of 35 other states. A libertarian would argue that individual has the right to do business anywhere he prefers, and he would present arguments why Lagos should be preferred.

A democratic capitalist (like me) would agree with him on these points, but would go further to establish that in the long run, and in the overall interest of all Nigerians, it is not sustainable to permit the concentration of economic wealth and influence in the smallest state of Nigeria.

Wealth that is shared by all is more secure than privatized wealth. Everyone must have a stake in something – that is the essence of democracy, and that is the goal of democratic capitalism – to ensure that everyone has a stake in the commonwealth of the nation.

Through future publications, I will attempt to shed more light on how democratic capitalism would work. I claim no monopoly of ideas over this concept. Like the best innovations, anyone with sufficient interest should feel free to add, modify, and even critique this concept.

PS: I wrote this article before the outbreak of COVID-19. I had personal doubts about publishing for reasons I cannot precisely place. But with Coronavirus shutting down global economic systems, I am convinced about the validity of this ideological position as a viable pathway for the world, After COVID-19. I hope to commence publications on a weekly basis where I discuss my projections for the world after COVID-19, and the place of democratic capitalist thought in shaping a more equitable and sustainable future.