This Day in History: Ethiopia formed a socialist republic on this day in 1984. Whether it is feudalism or socialism in Ethiopia, neither had helped this failed nation. People explain their constant famines in Ethiopia due to droughts, but other parts of the world have experienced droughts without the accompanying famines. Contrary to the way it is depicted, much of Ethiopia is extremely fertile. It could be the breadbasket of Africa, were it not for the government. Ethiopia has something called marketing boards which is supposed to protect farmers from price fluctuations. However, these boards would only pay farmers a tiny fraction of what their crops are worth. A 1985 article stated, "the private sale of food has been outlawed or severely restricted in many countries. In Ethiopia and Tanzania, for example, those caught violating the prohibition are beaten or killed."
A 2003 article states, "A farmer who earns $68 a year after expenses from cash sales of a crop is taxed 10%. Once a farm’s annual income passes the $4,235 mark, additional income is taxed at 89%. Wanniski wonders if such a tax system wouldn’t cause Ethiopians to starve in the absence of war and drought. Desperate for tax revenues, the Ethiopian government is blind to the incentive effects. Wanniski reports that there is a 150% excise tax on beer, 80% on soft drinks, 75% on tobacco, 100% on fuel, and so on. In addition, there is a 15% value added tax. With such gargantuan sales taxes, a poor country’s commerce is snuffed out."
"Mass famines occurred in many other communist regimes, ranging from North Korea to Ethiopia. In each of these cases, communist rulers were well aware that their policies were causing mass death, and in each, they persisted nonetheless, often because they considered the extermination of 'Kulak' peasants a feature rather than a bug." Source
"In 1975 the new Marxist government nationalized all land. Feudalism ended; 'Ethiopian Socialism' began. Instead of development, farm output, low to begin with, declined. Why? The principle of land distribution was to allocate to each family enough land to feed itself but no more. The use of hired labor was prohibited, as was the private sale of farm produce and machinery. The primary purpose of the reform said the UN, which applauded it as 'progressive' and 'forward-looking,' was to prevent the emergence of 'commercial agriculture' by making farm plots too small for machinery to be economically viable. Thus, the reform changed little. Under feudalism the farmer had little incentive to produce. Under socialism he has even less. Over 60 percent of Ethiopia is arable. But only 10 percent is cultivated. As one authority commented: 'The low rate of land use may be attributed to lack of motivation to produce anything beyond subsistence levels.” It is hardly surprising that these policies produced shortages. Indeed, it would have been surprising if they had not." Source
"Poverty is not a cause but a result of Africa’s problems. What African countries need the West cannot provide. They need personal liberty. That means a political system in which there are guarantees of private property rights, free markets, honest government and the rule of law. Africa’s poverty is, for the most part, self-inflicted. Some people might disagree because their college professors taught them that the legacy of colonialism explains Third World poverty. That’s nonsense. Canada was a colony. So were Australia, New Zealand and Hong Kong. In fact, the richest country in the world, the United States, was once a colony. By contrast, Third World countries such as Ethiopia, Liberia, Nepal and Bhutan were never colonies, yet they are home to some of the world’s poorest people."~Walter Williams
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