Lessons from Socialist Tanzania; S. Rydenfelt

Good intentions, however, are not enough. If you want to implement your vision, you have to start with a realistic blueprint. And, as experi ence later proved, Nyerere' s socialist blueprint was a dream far removed from reality. During its first years, Nyerere's government was occupied with transforming the country from a colonial area under British hegemony into a fully independent nation. Not until 1967 did the government feel strong enough to issue the Arusha Declaration, which implemented a comprehensive socialization program. All im portant industrial enterprises, including banks, insurance companies, export trade companies, Dr. Rydenfelt is a professor of economics at the University of Lund in Sweden. This article is an updating ofa chapter in Dr. Rydenfelt's book, A Pattern for Failure: Socialist Economies in Crisis. and even most of the larger plantations, were placed under government control.

In Tanzania, however, the great majority of the population earned their livelihood as smallholders in scattered settlements. Of course, such a "primitive" agriculture had to be socialized, too. And so the Tanzanian government-following the Soviet model decided to concentrate the multitude of small farms into large collectives called ujamaa vil lages. President Nyerere was well aware of the im portance of these small farmers. In a 1964 speech, he stated: "Our future, in every respect, depends on our farmers more than on any other single group of citizens. They are the people responsi ble for using our one great national asset-our land. They constitute more than 90 per cent of our people." Some months after the Arusha Declaration, President Nyerere published Socialism and Ru ral Development, in which he spelled out his agricultural program. Among his promises to the nation's small farmers, the following are significant: • Respect for the individual.

• Voluntary migration into the collectives. • The transition into collective production was to be effected gradually and quietly. • The ultimate stage-a collective large-scale agriculture-was to be achieved by persua sion, not by force. Private plots were to be allowed. Although the peasants were enticed with 350 THE FREEMAN • SEPTEMBER 1986 .c The Republic of Tanganyika in East Africa and the Island Republic of Zanzibar, off the coast of Tanganyika, joined to form a single nation, the United Republic of Tan zania, in 1964. Dar-es-Salaam is its capi tal. Tanzania is 364,886 square miles in area, roughly three times the size of New Mexico. Its population in 1984 was esti mated at just over 21 million. Famed Mt. Kilimanjaro, 19,340 feet, is the highest point in Tanzania-indeed, in all of Africa. schools, shops, medical care, and drilled wells in all the ujamaa villages, the voluntary reset tlement made only slow progress. In order to speed up migration, the government made fur ther offers: free transportation to the collec tives, free building materials, free food until the first crop was harvested, free agricultural ma chinery, and access to credit on favorable terms.

But in spite of the government's enticements and intensified propaganda campaigns, the peasants were reluctant to move into the collec tives. By 1974 only 2.5 million people had set tled in the ujamaa villages. The government had to choose between accepting a situation in which only 20 per cent of the resettlement pro gram had been carried out, or abandoning the principle of voluntarism. The Tanzanian gov ernment chose to apply brute force-the same policy that all socialist governments have used against their peasant populations. During the two following years, more than 10 million peas ants were forcibly moved into the ujamaa vil lages. In order to prevent peasants from return ing to their homes, many of their old settlements were burned. Despite the fact that fully 90 per cent of Tan zania's farmers were moved to collectives, the plans for agricultural socialism remain only dreams. Today perhaps a dozen of the 8,000 ujamaa villages function more or less in accor dance with the original plan. In the others, most of the land has been divided up, and each fam ily now cultivates its own fields as if they were private property. This total collapse of the so cialist plans in many ways corresponds to simi lar retreats in China and Vietnam.

The forced collectivization engendered dis trust and bitterness among the peasants, which led to a sharp decline in workers' morale. When the government further mistreated the peasants by instituting price controls on agricultural products, most peasants reacted by producing only for their own needs. Those peasants with surpluses tried to sell them on the black market. Such illegal markets, where consumers have to pay substantial premiums to compensate sellers for the risks of punishment, are the inevitable result of price controls. As Ludwig von Mises wrote: "Economics does not say that isolated government interference with the prices of only one commodity or a few commodities is unfair, bad, or unfeasible. It says that such interference produces results contrary to its purpose, that it makes conditions worse, not better, from the point of view ofthe government and those back ing its interference. "2 Price controls also led to smuggling. Peasants living near the border tried to smuggle their sur pluses into neighboring countries, where prices usually were many times higher than the con trolled domestic prices. In its efforts to stop the smuggling, the Tanzanian government closed the border to Kenya in 1977 (it was partly re opened in 1983). As a result, Tanzania lost a large part of its tourist trade.

Tanzania has a soil and climate extemely fa vorable for agriculture, and in 1961 the country LESSONS FROM SOCIALIST TANZANIA 351 was the greatest food exporter in Africa. The forced collectivization, completed in 1976, was a mortal blow to production. By 1980 Tanzania had to import no less than half its food. In a few years the country had gone from the greatest exporter to the greatest importer of food in Af rica. (Similarly, Russia before the socialist rev olution was the greatest exporter of food in the world; now it is the greatest importer.) Tanzania's socialist policies took a particU larly heavy toll on its ability to produce export commodities. The producion of sisal (a fiber used in twine) shrank from 226,000 tons in 1970 to 47,000 tons in 1983. Because of shrink ing export incomes, and the need to import food, very little foreign exchange was left to pay for other needed imports-raw materials, machinery, fuel, spare parts. As a result of these shortages, only 25 per cent of industrial capacity could be used, and the lack of fuel and spare parts for motor vehicles caused a virtual breakdown in transportation. Without transpor tation, food surpluses produced in the country side very often were left to rot. Electricity pro duction, railway transportation, and telephone communications were also hard hit.

By the 1980s, the Tanzanian economy had collapsed. After a visit to Tanzania in 1982, a Norwegian radio commentator offered the fol lowing description: "On days when bread was delivered to the stores, people had to line up for hours. Even commodities like soap, toothpaste, salt, flour, cooking oil, batteries and bandages were lack ing. People starve, and starving people get des perate. When I visited Tanzania in 1974 many things were lacking, too, but people still had optimism and enthusiasm. They listened to President Nyerere: If they worked harder, the future would be better. Now the President's calls have lost their magic; people are resigned. The brutal truth is that the policy of President Nyerere has completely failed ... The Tanza nians are unable to manage the many state en terprises, and today production is only 30 per cent of its volume a few years ago."3 Seldom has the gap between rosy dreams and dismal realities been wider than in socialist Tan zania. For example, in the Arusha Delcaration of 1967, President Nyerere proclaimed: "In order to maintain our independence and our people's freedom we ought to be self-reliant in every possible way and avoid depending upon other countries for assistance. . . Because the economy of Tanzania depends and will con tinue to depend on agriculture and animal hus bandry, Tanzanians can live well without de pending on help from outside if they use their land properly. "

The truth is that no country ever has received more aid per capita than Tanzania. In the eco nomic bankruptcy brought on by socialism, na tional begging had to be substituted for national pride. Socialist governments everywhere build their power upon support from the industrial and ur ban populations-a support that often is paid for with the promise of cheap food. And food prices are held down by price controls, which oppress and exploit the peasants, and lead to eventual shortages. These agricultural policies in socialist states have been analyzed and de scribed by economists like Michael Lipton and Theodore Schultz.4 Leaders in all socialist states maintain that their chief objective is to help and support the poor. In Tanzania this message was given spe cial emphasis by President Nyerere. In reality, however, socialists everywhere have pursued an opposite policy, favoring the prosperous and strong-the industrial workers, the police, the soldiers, the bureaucracy-and oppressing and plundering the poorest and weakest members of the population, the peas ams. 0 1. Julius Nyerere, Inaugural Address to Parliament on December 10,1962. Quotations from Julius K. Nyerere, Freedom and Unity: A Selection from Writings and Speeches 1952-1965 (London: Oxford University Press, 1967.) 2. Ludwig von Mises: Human Action: A Treatise on Economics (New Haven: Yale University Press, 1949, p.758).

3. Swein Wiel Jorgensen, Okonomisk Rapport, October 1982. 4. Michael Lipton, Why Poor People Stay Poor: Urban Bias in World Development (London: Temple Smith, 1977) and Theodore Schultz, Economic Growth and Agriculture (New York: McGraw Hill, 1968). Copies of Professor Rydenfelt's A Pattern for Failure: Socialist Econ omies in Crisis, are available from The Foundation for Economic Educa tion, 30 South Broadway, Irvington on-Hudson, New York 10533 at $9.95 each.