A Response to the Gravel Institute on the Economies of Former French Colonies in Africa

In their endless attempt to make Marxist exploitation theory hip with the kids, the Gravel Institute made a video demonstrating how, ostensibly, despite all the declarations of independence and their recognitions as being sovereign nations, French control of West and Central African countries never actually ended, and this conspiratorial notion can therefore be used to explain the lackluster performance of many of the economies of these countries in the decades following. As can be expected, this video includes the kind of socialist cope that neocolonial theory relies on. If socialist economics cannot be made to work, then that must be the fault of the former colonizer. All the work (and in some cases, outright war) for independence should be discounted, as the governments of the formerly colonized countries couldn’t centrally plan their economies, so there was no real independence. Of course, none of this is to say that France’s record in its former African colonies is impeccable or that there are not things to be critiqued. Indeed, the support of the dictators and the over 50 military invasions of Africa by France in the years after independence have been inexcusable and it was petty and wrong to flood counterfeit money into Guinea. The concessions to good points made in the video being pointed out, let us here out comedian and actor, Ismael Loutfi’s presentation. Who else would you want to learn about the economies of former French African colonies from?

So after briefly going over the terrible legacy of the French Empire, which did indeed include slavery, extraction, and murder, Loutfi then goes on to say that France’s empire is actually still around in a “more streamlined, more profitable, and even more exploitative way”. How one gets more exploitative than the literal forced labor (slavery) that the French inflicted in places like the Ivory Coast is never explained. A cynical viewer might think the makers of this video aren’t so much interested in actual exploitation, as much as they are eager to condemn the market economy. Anyway, the video goes over the history independence struggles in Africa and Asia, but says, without explanation as to why, that the French secretly decided to keep their old empire in West and Central Africa in all but name. When explaining how this worked, we already run into the territory of bad economic policy. So, the former colonies had to sign cooperation agreements saying that in exchange for French foreign aid, these countries would have to give over access to natural resources to the French, keep French troops in their countries, and keep using the Franc as their currency. All of these indeed sound like harsh conditions, but it sort of begs the question as to why foreign aid was so essential? If the country has smart economic policies, people will want to invest there and the economy will grow. As shown with Botswana, foreign companies will happily invest to access resources, which as this video makes clear, West and Central Africa have plenty of. Transferring wealth from one country to another is not a sustainable economic development model. Just ask Kerala. But even assuming some foreign aid was deemed needed at the beginning, as in South Korea, what makes France the only possible aid donor? The video doesn’t tell us. But none of that matters that much because the real crime was the forced adoption of the CFA Franc for these countries’ currencies. If this were coming from a Hayekian perspective advocating for the denationalization of money, this would actually be a good point, but of course, that’s not the case. The Gravel Institute wants these independent countries to have their own fiat money that can have the value of destroyed with the central bank’s printing press. As Zimbabwe can attest, this was quite a liberating experience.

Anyway, the video goes on to say that the French deceitfully framed these cooperation agreements as being choices, but cites the example of Guinea under President Sékou Touré to show that this was not really the case. The cut off foreign aid, as they said they would, but did indeed flood the country with fake banknotes. This was indeed reprehensible. If only Touré responded by abolishing the Guinean Franc and letting the market decide what the money should be, perhaps this wouldn’t have been a problem, but being a socialist former labor union leader who read Marx and Lenin and who declared he’d rather the country be poor in freedom than rich in slavery, this was obviously never going to happen. At the time of writing this, $1 is equal to 8,614.96 Guinean Francs. Either the French really did flood the place with counterfeit banknotes or the money printer never took a day off.

From there, the video starts arguing that the leaders of these newly independent countries spoke French and thus were not representative of the people living there. One wonders why Americans still speak English if we opposed Britain so much. Still, the video rightly condemns French support of dictatorships in some of these countries, like Gabon. It’s here where the economics gets interesting. They point out with disdain how France’s state-owned oil company was allowed to pump oil in Gabon. But aren’t state-owned companies what socialists want? Almost like socialist institutions aren’t free of what Marxists deem exploitation. (See cotton farming in Uzbekistan under the Soviet Union as an example of real exploitation.) It seems Gabon would have been better off if not for the bloated size of the French government. And yeah, Omar Bongo was a terrible kleptocrat. If this video wanted to argue that Gabon was or even still is a French puppet state under him and his son, it would be worthy of much more respect. But none of that matters that much because, apparently, Gabon was one of the happier cases. Seeing as Gabon’s GDP per capita in 1980 translates to over $20,000 today, this may be true. No question the Central African Republic is worse off and that it was wrong of France to support Bokassa’s dictator there.

From here, we get to the most dishonest part of the video: the claim that the CFA Franc being tied to the Euro is what keeps former French colonies poor. They claim that the ostensible fiscal discipline of the European Central Bank makes for an overly tight approach to credit which makes it difficult for these economies to grow and that any increase in value of the Euro thus makes exports from these countries less competitive. The problem with this narrative? The CFA Franc is not pegged to the Euro. Rather, 100 CFA Francs is pegged to 1 French Franc, which in turn equals 0.15 Euros or $0.16 USD. Clearly, countries using the CFA as their currencies are not in some kind of deflationary spiral, as this video seems to imply. To show the alleged damage of this policy, they point out how from 2000 to 2009, Senegal’s domestic rice was made less competitive compared to imported Thai rice. Why Senegalese consumers should have made to live for the sake of domestic rice farmers is unexplained and the benefits to Thai farmers unmentioned. Whether this misfortune really fell on Senegalese rice farmers because the Euro was too strong cannot be thoroughly debunked because no sources for the statement were provided, but given how 0.0016 dollars equals 1 CFA Franc, this seems unlikely. All the same, this is the problem with government-issued fiat money.

From here, the Ivory Coast’s having an inflation-adjusted GDP per capita that is a third below what it was in 1980 is not attributed to the departure from Houphouet-Boigny’s more liberal management of the economy and the turn towards statist control, as well as two civil wars, but the fact that it’s the largest CFA Franc country. Cameroon and the Republic of the Congo are mentioned as having had their highest real GDP per capitas in the 70s and 80s. Whether anything has changed in their economic policy is unexplained. If the CFA Franc is keeping these countries so poor, one wonders how these countries got so rich in those decades, since they didn’t have their own currencies in those decades. We’re never told. From there, a bunch of Marxist nonsense about the wealth of these countries are being sucked off and it ultimately culminates in a dumb Michael Parenti quote claiming that third world countries are not underdeveloped, but rather overexploited. Marxists apparently see capitalism to just be Conquistadors running off with gold and silver. It would be funny if not for the fact this video has over 365,000 views and over 23,000 likes on YouTube. The kids are not going to be alright if this is their economics lesson.