The fact that regionalism is popular is undisputable. While regionalism has grown in popularity, the global economy has been dominated by neo-liberal capitalism and states have limited space for economic policy options. However, states and regions retain the ultimate authority in as far as choice of policies is concerned. The sovereign right of states is upheld despite these global economic trends. Before discussing the relationship between the globally dominating economic policy options of regionalism and neo-liberal capitalism and the related ethics, the ethical issues of the state in its role as the major source of economic policy options will be described.
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In an attempt to put the utilitarianism theory of ethics into context, the writer will first examine the concept of utility around which utilitarianism is built. Little (2002) observed that Jeremy Bentham (1789), who is regarded as the father of utilitarianism in ethics, understood utility to be whatever was conducive to happiness, and that there was a need for a balance between pleasure and pain. Later, after he realised that whatever people would have paid for is not what always made them happy, utility come to be understood as ‘desiredness’. Further debate on the concept of utility presented it as an issue of choice. In this understanding people would make a choice of
‘A’ rather than ‘B’. Economists argued that such a choice would have been influenced by the preference for ‘A’. However, the accuracy of this thinking was questioned as one could choose
‘A’ although he or she would have preferred ‘B’. The choice for ‘A’ could be based on the influence by peers or society (Little 2002). For good reasons, people may make choices which are against their preference because they would have been considered to be better for them (Marshall, 1920). This debate made utility finally be understood to be coming purely from choice.
Utility theory argues that when choices are made, they must be reflective in that if ‘A’ is chosen rather ‘B’, then ‘B’ must not be chosen instead of ‘A’. Furthermore, the theory argues that choices must be transitive, implying that if ‘A’ is chosen before ‘B’ and ‘B’ is chosen before ‘C’, then it should always be that ‘A’ will always be chosen before ‘C’. These acts of choice should be consistent in order to satisfy function and to achieve maximisation of utility (Little, 2002; Von Neumann and Morgenstern ,1953).
In this context, the choice of an economic policy by the state should be seen as one which leads to the maximisation of utility. SADC states have generally preferred economic policies such as indigenisation and this has been popular in member state’s domestic policies. However, at the regional level, the preference for the African economic ethic of indigenisation is not evident.
Regional integration at the multilateral level has been preferred ahead of the African economic ethic of indigenisation. Furthermore, neo-liberalism appears to have also been preferred at the individual state or national policy level but the same liberal character at the regional economy is not evident. The failure of indigenisation to empower the black people has led to preference being shifted slowly from the African economic ethic of indigenisation to neo-liberal capitalist practices. The idea is to attract local and foreign direct investment to stimulate economic growth
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with the hope that this will help deal with poverty through employment creation and spill over effect. This idea of attract foreign direct investment would stimulate economic development but the economies will largely remain in the hands of the extra-regional foreign investors. The requirement for indigenisation will therefore not be addressed. Furthermore, the domestic economies have not fully opened up to regional partners in a regional neo-liberal economic framework. Instead, regionalism has been slow and neither neo-liberalism nor the African economic ethic of indigenisation have been fully embraced at the regional level. Evident in most SADC countries is an earlier preference for the African economic ethic of the indigenisation which was later abandoned for the neo-liberal economic policy at the national level. Regionally, there is a preference for regionalism, but the practice of states suggests closed economics with no evidence of neo-liberal economic practices at the regional level. If utility theory argues that greater utility is expected from choices, then at the national level the choice and emphasis on neo-liberalism is expected to deliver greater utility and should always be chosen ahead of the African economic ethics of indigenisation. At the regional level states have not chosen full regional integration, but rather they have chosen to practice some kind of closed national economic policy which is not liberal to the regional economy.
Though the African economic ethic of indigenisation is popular and also preferred at the national level, utility theory says that, by choosing neo-liberalism at the domestic level, greater utility is expected to be achieved than that would be realised from the African economic ethic of indigenisation. At the regional level the choice of not supporting an open neo-liberal regional economy suggests countries at the national level do not expect to derive greater utility from regional integration. It would appear that if utility is maximised by choices then some contradiction seems to be evident in the choice of economic policies at the national levels in SADC. This casts further doubt on the ability of the choices to deliver the greatest utility for the benefit of the greatest number of people. This calls for the rethinking of the preferred African economic ethic of indigenisation and regionalism in SADC. In their present state it would appear they will not give the greatest utility to the states and the people.
The form of utility discussed above is only ordinal and does not quantify the amount of utility for comparison. Expected utility takes into consideration the various probabilities of choosing certain options and this can be quantified for comparison of the differences. Little (2002) argued
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that economists and all those concerned with policy formulation usually choose policy options with greater utility. In this case, greater utility is the criterion of “better-offness” (Little 2002:8;
Bordley and Pollock, 2009). Economic policies that are chosen should deliver “better-offness” to people and hence reduce poverty.