ShmoopTube

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The invisible hand of the free market can get tied up sometimes. [Hands tied by rope]

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The biggest issue is called…regulatory capture.

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This is when a government agency that’s supposed to be free of corporate influence

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gets taken over by a specific company.

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Then the corporation twists the government to its ways and pumps up its own profits,

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often at the expense of the people. ['Corporation' arm pumps up a 'profit' balloon]

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From the 1970s to the present day, regulatory capture has been hitting new and frightening levels.

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In the 80s and 90s in Nigeria, it was totally out of control. [Graph of regulatory capture quickly going up]

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Regulatory agencies, judges, lawmakers, political parties…all were in on the take. [Judge taking money]

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Corporate capture was like Godzilla on the loose, except that it built skyscrapers instead

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of smashing them.

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Though it did still squish innocent civilians in the process. [Godzilla stands on a person]

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In Nigeria, each party had a bank, corporation, or lobby group that ruled its decisions.

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Virtually all decisions about permits, environmental regulations, foreign scholarships, and business

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taxes were made to reward the companies that were buddy-buddy with whatever party had its [Person driving a car]

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hands on the steering wheel.

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Although Nigeria has cleaned up some of the corruption since about 2000, government policy [Nigeria sweeping away corruption]

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is still mostly controlled by corporations and interest groups.

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When a capitalist democracy’s free market gets hijacked by corporations it’s called…somewhat ['Corporate' man hijacking a plane]

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predictably…corporatism.

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It’s like the day they finally build a combination Starbucks/McDonald's on the White House lawn.

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Nigeria is Africa’s most extreme example of corporatism gone wild, but we can also [Person using a hula hoop and Nigeria chucking cash on the floor]

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look to Uganda, Kenya, and, to a lesser extent, post-apartheid South Africa.

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However, just like socialism, some countries that went capitalist early still managed to [Car does a u-turn in the road]

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turn it around.

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Nigeria's extreme corruption prevented the government from building adequate education,

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health services, and infrastructure. [Teacher and school children in a classroom]

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On the other hand, capitalism allowed Nigeria to export boatloads of oil…literally…like [Oil tankers moving around]

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a lot of boatloads.

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Since the 1960s, oil companies, especially Shell, have drilled Nigeria like crazy, and

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there's still a lot of oil left. [Nodding donkey oil pump with the Shell logo]

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Nigeria now surfs the oil trends.

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When the world oil market is good, Nigeria is one of the better-off countries in the world. [Nigeria on a surf board]

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The oil money has led to the rise of Africa's largest city: the well-developed coastal capital

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of Lagos.

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However, when Nigeria's oil runs dry there’s no telling what’ll happen. [Empty well]

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We’re hoping everybody deals with it by hugging it out, but it probably won’t be

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like that.

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Hopefully, Nigeria will use the money to create other industries to keep the country on track. [Nigeria, Kenya and Uganda on an athletics track]

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Capitalism worked out better in Kenya.

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Even though Kenya is more corporatist than capitalist, regulatory capture has actually

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produced a lot of jobs.

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Telecommunications companies pretty much own the Kenyan regulatory agencies, and they’ve [Man in a suit on a mobile phone]

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written laws that give telecom companies a lot of advantages.

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The plus side of this is that Kenya has become a major home base for telecoms and mobile

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phone companies.

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Also, corporate HQs need loans.

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So banks have popped up like mushrooms to give them what they need. [Mario hits a block and a bank pops out]

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All this hustle and bustle keeps many Kenyans living in style. [Kenya watching a flat screen TV]

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Making the jump from colonialism to capitalism can work.

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Like bungee jumping off of Victoria Falls, it can be amazing…

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…but it can also end in a great big splat. [Man bungee jumps and the rope snaps]

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