May 5, 2022

Economists, World Bank/IMF, central banks deify money

Economists, World Bank/IMF, central banks deify money

By  Francis Ogbimi 

THE discipline of economics has many deficiencies. That is the reason economists in Europe, America and their students in Africa cannot manage any economy well. Two of the deficiencies are particularly serious.

They are lack of sense of history and lack of understanding of the science of industrialisation and development. The consequence of these two deficiencies is that economists in classrooms, the World Bank and IMF, central banks, ministries of finance, debt management offices, etc., in developing nations merely deify money.

That is, they try to demonstrate that the god of money is the solution to all problems. They are very wrong. Money is no solution to any problem. In doing this economists and related institutions like the World Bank and IMF create problems and institutionalise stagnation in the poor nations in Africa, Latin-America and Asia. They do not solve any problem. 

What do I mean when I say that economists have no sense of history? First, economists unwisely disregard the facts, lessons and the advice of history. Second, economists do not incorporate the facts of history into their analyses. The modern Western Europe was the ancient Gaul (Carrington and Jackson, 1954).

Ancient Gaul was harnessed into the Roman Empire in 55 B. C. The western portion of the empire broke up in 406 AD. Various forces created the different nations in modern Western Europe.The nations in Western Europe today became well defined in the period between the 10th and 13th centuries.

Economics as a discipline was developed in the early 18th century through the beginning of the 19th century. England was the most progressive nation and the nation achieved the first modern Industrial Revolution, IR, in the period 1770-1850. Other nations in Western Europe achieved the modern IR after England did. All nations in Western Europe were poor and chaotic before the IR. So we can say industralisation is theprimary basis of the high productivity in Europe.


It is the solution to mass unemployment, poverty and insecurity. The infrastructure – roads and bridges, electricity generation and distributing systems, canals, airports, cities, riches (money), the banking and finance sector, and the diversified (many-sector) economy, etc., are fruits or aftermath of the IR. This is the history of the development of Western Europe. The wealth, including money in Western Europe, the rest of the West and Asia is a fruit of the industrialisation there.  

What is the science of industrialisation which economists disregard? Industrialisation entails developing the scientific and technological capabilities of a people. All human beings are born as crying babies.The baby soon babbles (learns how to talk and speaks a language). All other capabilities are acquired through learning (education, training, employment and research).

The intrinsic value of the learning-man appreciates in a compound manner and may be modelled by the compound interest formula. Analysis of this basic formula showed that the rate of learning determines how soon the learning-person achieves a desired target. Scaling the basic formula showed that the growth of a nation in achieving sustainable economic growth and industrialisation can be monitored by five learning related variables. They are:

1) N – the number of people involved in productive work or employment in a nation; 2) M- the level of education/training of those involved in productive activities in the economy and of the people of the nation; 3) L – the linkages among the knowledge, skills, competences and sectors of   an economy; 4) R – the learning rates or intensity in the economy and especially among the workforce; and N – the experience of the workforce and the learning history of the society. The higher are the values of the variables, the better is the economy.

A nation achieves modern indusrialisation when the five variables attain critical values. It is because industrialisation is a learning and capability-building process that any nation that learns and builds-up knowledge, skills and competences to critical levels achieves Industrial Revolution. Industrialisation is internal to a nation. Europe and Asia nations learnt very slowly and achieved the modern industrialisation in 2000-3000 years.

The economic progress of the United States of America showed evidence of a more intensive learning. By 1800 more than 90 per cent of Americans lived on farms or tiny villages. The farms and villages formed thousands of different economies rather than one economy. The subsistent farm was the characteristic unit of the American economy then; father and mother and children spent most of their time producing the basic necessities of life: food, fuel, clothing and shelter.

The belief that the future of America rests on sound public school was common among early American leaders, though they themselves did not have opportunities for good education. Consequently, Americans displayed fully the versatility of an educated people.

The New England states (Maine, New Hampshire, Vermont, Massachusetts, Rhodes Island, Connecticut) and Pennsylvania were the first to establish public educational systems to educate all young people. It was also in these states where sound and systematic education had been practised longest and where it was most developed that the greatest manufacturing development occurred first.

The young American learnt always at that time. Compulsory education laws of most the states and especially the New England states and Pennsylvania promoted high intensity learning. At the end of the 19th century, Americans looked back on the 35 years after the Civil War (1861-1865) with amazement.

The entire nation had been transformed in their life time. All around them were huge new cities, large population, bewildering array of new machinery, a vast railroad network, and thousands of new factories, mills and mechanised farms. Economists and the related institutions do not concern themselves with the science of human development and industrialisation. They talk of money, infrastructure, foreign investments, loans, intervention, etc. They have been planning for Africa for over 50 years doing what they do not understand.

The World Bank predicted that Africa will have most poor people by 2030. The World Bank in its Africa’s Pulse, a twice-yearly analysis of the issues shaping Africa’s economic prospects predicted that most of the world’s poor people by 2030 will live in Africa.

 The Africa’s Pulse had stated that economic growth in Sub-Sahara Africa, SSA, remains strong with growth forecast to be 4.9 per cent in 2013. Almost a third of countries in the region are growing at six per cent and more, and African countries are now routinely among the fastest-growing countries in the world, the analysis revealed.

Africa’s Pulse also noted that, Africa buoyed by private investments in the region and remittance then worth $33 billion in a year – GDP growth, will continue to rise and peak up to 5.3 per cent in 2014 and 5.5 in 2015. Strong government investments and higher production in the mineral resources, agriculture and service sectors are supporting the bulk of the economic growth, Africa’s Pulse also said.

Africa’s Pulse also observed that as Africa’s growth rates continue to surge with the region increasingly a magnet for foreign investments and tourism, the poor nations in Africa, Latin-America and Asia will remain poor as long economists and related institutions continue to plan for them.

Prof. Ogbimi, an economist, wrote via [email protected]