I can see that, being big, the USA could have influenced the exchange rate of the Zimdollar when it existed, but how can the poorest country in the world have any influence on the exchange rate of a major currency, even within their own borders? If we tried it, they’d hit back.Remember that when a country sets its own exchange rate higher than other people accept, those other people will find ways of exchanging at a rate they think more reasonable. But, since we don’t have a currency of our own, thanks to ZANU economics, we don’t even have the power to try that trick.
Of course, every devaluation is a kind of theft. They are telling you the dollar in your pocket is suddenly worth less than it was yesterday, so where did the missing money go?
ZANU-PF are reduced to playing tricks like this because they never understood that money doesn’t come out of the air, or from Santa Claus’ toy factory or from printing more.
Growth of an economy is a technical term for producing more in the country. We don’t produce anything but unmarketable hot air, so everyone is reduced to buying and reselling. There’s no growth in that because there’s no new value produced.
ZANU-PF don’t understand the idea of value; it is different from the price or cost. Put simply, a sack of maize has a value because it is useful. You can eat it. Unless you want to use a diamond to cut very hard material, it isn’t useful. You can’t eat it. It doesn’t cover much if you wear it and certainly doesn’t protect you from cold wind or strong sun. It hasn’t really got much value. People with more money than sense are ready to pay a high price for it because it is rare, unusually big or pretty. If foreigners hadn’t come to buy these baubles cheap and then sold them at much a higher price, we’d probably have left them lying around for children to play with. We wouldn’t have exchanged many bags of maize or many hoes for one.
For another example, the peoples of what we now call Latin America thought the Spanish were mad because they’d kill for gold. They may have used it themselves as ornaments but didn’t think those ornaments were very valuable. The Mayas used to dress their human sacrifices in it, because it was heavy; a maiden wearing 20kg of gold won’t take long to drown in the sacred well and there was always plenty more gold, so why bother taking any out of the well?
If rich people choose to spend a lot on gold, diamonds or rare paintings that needn’t concern the rest of us – unless they stole the money. Unfortunately they usually did steal it. Nobody who had to do real work for their money would throw it around the way they do.
If we were producing enough to feed, clothe and house ourselves, as we did before Rhodes and his gang arrived, we might not mind if some people had more and chose to waste it. We might not object to paying them tax if we had enough money and they did something useful for us in exchange. Our rulers since 1980 never understood this. Some rulers before them insisted on taking more than their fair share of the country’s wealth, but they didn’t take it all.
When you think about it, you see why the governments of most successful countries in the world today prefer to raise money as VAT, Value Added Tax. If you buy a sack of maize and eat it, you are not consuming anything very valuable. But if you plant it, water it, weed it and harvest it, you produce a lot more maize. You have added value to it and it’s no great hardship if the government wants to take a reasonable percentage of that added value to provide services for the whole community. The same applies to any kind of productive work, like digging iron ore (a stone of little more value than any other), converting it into tools (which adds a lot of value) or using those tools to cut wood and make it into furniture.
“A looter continua†only reduces the value of everything it touches. That is why I agree that Robert Mugabe’s economics degree should have been withdrawn. He failed the practical exam. The same goes for Gideon Gono and all the other whizkids who bedazzled him into this folly by pretending they could always produce more money with smoke and mirrors.
Post published in: Opinions