Two-Page Summary of Asiwaju’s Articles

“I believe the highest objective of macroeconomic policy is to provide all people the basic necessities of life, then to progressively improve the lot of as many people as possible through broadly-based wealth creation by all segments of society and an equitable allocation of the fruits of the increased wealth to all, from those who labor to those who invest or supply capital. All must be duly rewarded.Balance must be maintained in the political economy so as no class becomes so powerful and affluent that they can bend the entire nation to their undue benefit.
This is the progressive’s macroeconomic creed.

My policy is to use our currency sovereignty to spur economic activity. Government should deploy fiscal policy to engage in non-debt deficit spending on productive ventures that modernize our infrastructure and provide jobs. This is a far cry from nations printing money in order to purchase foreign currency to redeem foreign-denominated debt. One method is productive, the other promiscuous. They are as different as giving a shovel to your brother that he might help dig the foundation of the family house or giving the tool to an irate trespasser. That you may be hard struck in the later instance should come as no surprise.

An overview of how we now fund government will better explain my concerns regarding the path this government has taken.Nigerian oil is exchanged for dollars. The dollars are then used as the basis to calculate the naira to be given the federal government. This process basically treats our money as a finite commodity and not as the sovereign instrument of a national government.

Money is generally represented as a tangible thing; its essential nature is otherwise. To treat money as a commodity is a subtle but grievous error. Money historically has taken the form of cowry shells, precious metal, paper stamped with pictures of famous personalities, and electronic transmissions. The essence of money is not found in the thing used to represent it. Those things change over time and with technology. Money is an idea, a social convention. Money is the concept of storing economic value in an agreed medium so that value can be transported over geographicspace and across time. Money is not the gold or the cowry. Money is the intangible idea these tangible things represent.

If the nature of money renders it more sublime than that of a commodity, its functional use should also transcend how we use a commodity. Money should be used in a manner that assigns appropriate economic value to all potentially productive labor, resources and capital within the nation. To attach money to these things requires that they are placed in productive use and in the stream of commerce. Conversely, that which has no money attached to it is idle and unproductive. A jobless man with no family or friends has no income and receives no relief. Being unproductive, he has no money. As such, he is deemed to have no economic value. Economically, an able human being has been reduced to a cipher. The goal of progressive macroeconomic policy is to liberate people from this dismal circumstance.

Policy should minimize idle capacity by attaching value to these economic elements by funding their employment in productive endeavor. A government that enjoys the sovereign right to issue currency should not restrict its currency’s use to the amount of foreign currency it receives. This restriction forfeits much of the fiscal power resident in the federal government. This has nothing but mean consequence for the great number of ordinary people, especially the unemployed.

Forever tying the level of naira to dollar revenue intake means our economic decisionmakers have turned exchange rate management into the nation’s primary macroeconomic goal. This is tantamount to giving food to the shadow yet leaving the actual man unfed. A sustainable exchange rate is a function of our economic strength not vice versa. A mechanistic pursuit of a high exchange rate as the chief policy objective is to love the image on the map more than the actual nation the map represents. The exchange rate is but a factor that helps measure economic strength; it can also be a tool used in building that strength. But, it is not that strength.

The overriding economic objective is to produce sufficient economic growth and development that allocate equitable shares of income and wealth among the nation’s economic constituencies. If we achieve the target of this aim, exchange rate stability will follow suit. Should we labor otherwise by giving primacy to exchange rate, we shall achieve neither exchange rate stability nor adequate economic growth.”