In the first part of this series in which we are calling for an economic summit now rather than constitutional conference, we explained that we are doing so because: Our research revealed that all the rich and powerful nations in the world today are industrialised. Industrialisation is achieved through learning and Nigeria can mobilize all Nigerians for integrated learning – education, training, employment and research; and achieve accelerated industrialisation in a few decades. That is to say that Nigeria should focus on the economic development path rather than the political path which European and Asian nation took and toiled for 2000-3000 years before achieving the modern industrialisation which solves the basic problems of a society.  

The second part of the call argued that European and Asian nations toiled and suffered for a long time because they did not know what to do to achieve sustainable economic growth and industrialisation, SEGI. Though many would argue that it was because of corruption, no, it was not corruption that delayed progress for a long time in Europe and Asia. Because they did not know what do to promote SEGI, they did not do things that would promote SEGI. There were no public educational systems of any type in Europe for about 2000 years. European scholars did not anticipate the industrial revolution (IR) which Europe achieved beginning in England 1770-1850 and European scholars have not explained what the IR entailed and why Europe achieved it. 

Latin American and Caribbean and African nations and some Asian nations, the former colonies of European nations have the additional problem of being indoctrinated in the wrong ideas of Europe about the growth and development of societies and that is the reason politicians in the former colonies borrowing impulsively and accumulating burdensome national debts and subject the so-called independent nations to the controls of the World Bank and IMF and Western creditors. 

Yet it is not corruption that is delaying rapid development in the former colonies, for clean Tanzania of Julius Nyerere’s days and clean Ghana of General Rawlings’s days did not achieve rapid SEGI. The failure of Latin American nations to make reasonable progress after toiling for over 200 years so far, is a warning that Nigeria must pursue the innovative approach of emphasizing the economic path to building Nigeria a great nation.

The third part of our call for economic summit in Nigeria explained why the programmes being implemented in Nigeria and other African nations will not and cannot promote rapid economic and political development for a long time. 

This fourth part in our series calling for an economic summit, now, rather than constitutional conference, again, is still focused on explaining why Nigeria has not been making sustainable economic growth. This time, the effort is focused on the economy – the contrast between the claims which underlie the way economists, accountants, bankers and their associates think, write and do things in an attempt to manage the economy for economic growth and control inflation pressure and true situation. 

The fundamental basis of economics and related fields of accounting, banking was established by Karl Marx in his book, Capital (1867). Karl Marx wrote after the English Industrial Revolution (IR) 1770-1850. In his book, he observed that the key feature of the capitalist system is that machinery facilitates a continuous revolutionary and creative production in agriculture and industry, communication and transportation. He also said that the capitalist must accumulate capital to start. In other words, Karl Marx was the first to give credence to the belief that capital investment is the primary source of sustainable growth and industrialisation, SEGI (Gerschenkron, 1966).

The claims of Karl Marx are historically false. The claims of Karl Marx, scientifically, are not true. In 1770 there were only 12 (twelve) private banks in England (Hanson, 1977). The industrial revolution (IR) which took place 1770-1850 in England (Gregg, 1971), had transformed the number of private banks in England to 843 in 1821 (Hanson, 1977). That suggested that the IR produced the banks in England, not the other way.

All structures experience DEPRECIATION. This is the scientific nature of all structures. ALL structures are depreciating Asset (DAs). So, we can write for any structure, Vo ≥ Vt, where Vo is the value of the structure when it was erected or purchased and Vt is the value any time later. When we change the inequality to an equation by incorporating the depreciation the structure has experienced with usage and time, it is demonstrated that the investment statement/plan of the individual or nation emphasizing capital investment is one that decreases with time and usage. That is, the young nation emphasizing capital investment may be likened to the individual trying to fill a profusely leaking water-tank with water – a futile effort. This scientific analysis showed that Karl Marx’ claim about the special role of capital investment in promoting SEGI – the fundamental premise of economics is a fallacious claim.

Abramovitz (1956) and Solow (1957), showed that about 90 per cent of the growth in output per head in the American economy during the late nineteenth century through the first half of the twentieth century could not be accounted for by increase in capital per head. Abramovitz was disappointed at the lopsided importance which his study attributed to non-capital input in determining production output. The findings of Abramovitz and Solow disappointed economists, because economists had been brought up to believe that capital accumulation and investment play a critical role in promoting sustainable economic growth and industrialisation, (SEGI) (Thirlwall, 1972). Abramovitz was honest and advised economists to look somewhere else from capital in search for the source of SEGI.

Economists did not heed the advice of Abramovitz. Economists with many spurious assumptions transformed Karl Marx’s claims into the Harrod-Domar model for managing growth in the economy. The economists, through many spurious assumptions also developed the Money Quantity Theory (MQT) for managing inflation in the economy.  

Economists’ MQT was developed by claiming that money has a velocity that is proportional to price index like the Consumer Price Index (CPI), hence preventing customers from cashing money from their accounts in banks will reduce the velocity of money and inflation. This is unfortunate. It is this false conception of the relationship between inflation and money that is the basis of the ‘’cashless economy’’ programme which has and is still inflicting untold pain and indeed killed some people in Nigeria during the past three years. This programme will never reduce inflation in the Nigerian economy.

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