Black Marxists and the character of an African Leninist economy

In 1963, the Ghanaian government passed the Capital Investments Act, removing the requirement that companies reinvest 60 percent of their profits after tax to Ghana.[1] The nation’s leader Kwame Nkrumah hailed the Act’s success in “encouraging … many private investors … to flock in with proposals to establish business[es] in Ghana.”[2] In his speech at the opening of the Unilever Soap Factory in Tema that year, Nkrumah simultaneously supported the Act’s introduction and outlined some tenants of his and his government’s economic governing philosophy – the welcoming of private capital and foreign investment – in essence, capitalism, within a socialist society. He noted, “Some people think that Capital Investment is in contradiction with our socialist aims and ideas. This is not true.”[3]

Nkrumah’s statement next to Unilever, a British company that had amassed power and wealth during the colonial era at Africans’ expense, indicated that not only were capitalism and socialism compatible with Ghana’s political project but that foreign companies, even those with a dark colonial history, had a space within Ghana’s new socialist society. As a governing and economic philosophy, both socialism and capitalism had a role to play in Ghana’s construction.

Nkrumah’s remarks about the economic, intellectual, and political coherence of pursuing capitalism and socialism within a national economy exemplified a hot 20th century international debate within black and global political thought about whether combinations of capitalism and socialism could cohere within a Marxist state project.[4] Caribbean Marxist historians Walter Rodney and C. L. R. James vibrantly represented two ideological spectra of critique. Both used the example of Nkrumah’s Ghana to articulate their positions.

In a 1975 lecture at Queens College in New York City, Rodney robustly criticized Nkrumah’s political-economic project as ideologically unviable and contradictory because it was a “mish-mash” of both socialism and capitalism. For Rodney, Nkrumah’s socialist policies were “whimsical” and failed to address the contradiction between “socialist premises” and the capitalist system, which could not coexist within a singular economic model.[5] The former was an economic system where the state and workers owned and dictated the industries and the economy writ large, and the latter an economic system where private individuals and companies, under the moniker of “market forces,” have free reign to act on and operate with little to no government intervention.

James disagreed with Rodney, arguing that capitalist and socialist policies could exist side-by-side, concluding that a combination of capitalist and socialist modes of production was at the root of the Soviet Union’s 1920s economic philosophy and political-economic project called the New Economic Policy (NEP). He called this state capitalism and questioned how anyone could understand the USSR system, the epitome of a Marxist state project, as anything else.[6] Underlying the James-Rodney debate was the recognition that both capitalism and socialism were operating simultaneously within Nkrumah’s Ghana.

This chapter revitalizes the Rodney-James debate by first reconceptualizing Nkrumah’s links to the Soviet leader Vladimir Lenin’s state capitalist ideas, particularly whether capitalism and socialism could coexist within a Marxist framework. In doing so, the chapter recreates the intellectual and geographic biographies and circuits of Nkrumah and a few key Anglophone Black Marxists from 1917 to 1957.

It demonstrates that Nkrumah’s political-economic philosophy and Ghana’s economic project were embedded within Anglo-black Marxists’ understanding of both Lenin’s state capitalist ideas and their rehistoricization of Soviet society in the 1920s and 1930s. This shows how ideas from the Soviet experiment were useful for black socialist leaders to reimagine their own societies.

Second, the chapter reassess Nkrumah’s Ghana within the praxis of socialist state capitalism. It undercuts the historiography that Nkrumah was carte blanche against foreign investment and capital, showing instead, how the Ghanaian state sought foreign capital and investment while staying true to its socialist ethos despite some internal rumblings about the socialist character of its development. Ultimately, a proper understanding and rehistoricization of the Ghanaian economy permits an alternative reading of postcolonial and socialist economies, socialism in Africa, and how formerly colonized peoples envisioned remaking new societies and black freedom out of colonialism’s extractive ashes.[7]

After Ghana had become a Republic in 1961, the year some have argued the state turned away from capitalism,[8] Ghana’s Cabinet Secretary informed Ghana’s ministers that “There was no proposal that the establishment of projects by private enterprise should be discouraged or forbidden ; the ‘private enterprise’ sector will remain.”[9] Some took this decision as evidence that Nkrumah and his ‘henchmen’ had finally done away with capitalism, that nationalization efforts were underway, and that Ghana had become wholly devoted and enamored with communism and the Soviet Union.[10]

However, this was and remains a severe misreading, and it was economically dangerous for the new state, as it scared off investment, prompting the Ghanaian government to address the issue directly. In 1962, the Ghanaian Presidential Cabinet drafted a statement reminding the world that it had “no intention of considering any proposals from the owners of private business for the sale of their business to the government.” Moreover, the government stressed its support of private capitalism and initiative – in fact, it welcomed it. The document continued : “The Government takes this opportunity to restate what it has stated on many occasions in the past, namely, that it gives recognition to the existence of private initiative and investment in the nation’s economy, and that it expects private initiative to play its role in the economic development of the country, side by side with state and co-operative enterprises.”[11]

At a dinner with businesspersons at the Flagstaff House in early 1963, Nkrumah informed the attendees that Ghana’s ideas “of socialism can co-exist with private enterprise.” Nkrumah was adamant that private capital and private investment capital, in particular, had a “recognised and legitimate part to play in Ghana’s economic development.” Nkrumah was emphatic that socialism and capitalism could exist. He continued : “I have never made any secrets of my faith in socialist principles, but I have always tried to make quite clear that Ghana’s socialism is not incompatible with the existence and growth of a vigorous private sector in the economy.”[12] In an interview with the BBC Network of Africa in 1979, Imoru Egala, the former minister of Industries in Nkrumah’s cabinet, maintained that Ghana had a “mixed economy” under Nkrumah, where the state did not own most of the means of production.[13]

The US State Department concurred this assessment. In 1963, the American ambassador to Ghana, Wilson Flake, and the US State Department concluded that Ghana pursued “a mixed economy in which private capital is active and foreign investment welcomed.”[14] The US State Department boasted about its strong investment in Ghana’s economy, especially its financial support for the Volta River Project.[15] The combination of socialism and capitalism – state capitalism, the mixed economy – was a hallmark and deliberate feature of the socialist decolony.

It was not a bug, an accident, or an ill-conceived or ideological contradiction. Instead, it drew from a longer political-economic and intellectual heritage situated within black Marxists’ reading of the Soviet experiment. Nkrumah publicly informed members of the business community that “Ghana expected businessmen, industrialists, manufacturers and investors to play a significant role in” Ghana’s economic growth and development. “Invite your business friends to come here and see with their own eyes the happy atmosphere pervading everything we do.”[16] This was not a secret speech. It was reproduced in The New Ashanti Times. Nkrumah did not articulate his position privately so that only businesspersons might discover his ‘real’ pro-capitalist leanings. Nor did he articulate it clandestinely to cover his left flank.

Even contemporaneous British officials and the British conservative press concluded that Ghana was indeed pursuing pro-capitalist policies. On October 16, 1963, the British conservative newspaper The Daily Telegraph conceded that Ghana “continued to … welcome” private investors as long as they were “fair to us (Ghana).”[17] Another article acknowledged that Ghana’s “lifting of … re-investment regulations” would enable British corporations like the Ashanti Goldfield Company and the Consolidated African Selection Trust, a diamond group, to continue “to make large investments in Ghana.”[18] These measures prompted the British Financial Times to admit that Ghana was making numerous concessions to “foreign investors and would-be investors.”[19] In fact, Ghana was one of the nations calling for the unrestricted movement of goods internationally, criticizing alleged pro-capitalist countries for state intervention in the market.

At the General Agreement on Tariffs and Trade (GATT) meetings in May and June 1962, Ghana, alongside Nigeria, Indonesia, and Brazil, called on the former colonial powers, the public promoters and defenders of capitalism, to reduce and remove trade barriers for their goods. The Ghanaian delegation criticized Japan and France’s cocoa “restrictions” and urged the former (and current) colonizing powers to reduce, if not certainly remove, their tariffs.[20] Ghana called for the unrestricted circulation of its goods within the global economy. Western industrial countries were attacking Ghana’s leaders for seeking to protect its economy from foreign exploitation while engaging in similar tactics !

On November 29, 1963, a writer with the pseudonym X’ray published “Sugar Industrial Complex” in the CPP’s socialist, pro-African liberationist and Pan-Africanist magazine, The Spark. X’ray acknowledged that the “private sector of the [Ghanaian] national economy is forging ahead as seen in the strides being made under Capital Investments Act.” X’ray welcomed the influx of private capital and capitalism because it was “subordinate” to Ghana’s broader economic visions.[21] “The Government,” Nkrumah noted, “will continue to encourage private investors to establish and operate in Ghana. Our Government has no plans whatever to take over industries in the private sector.”[22] This statement was consistent with Nkrumah’s long-held view that the state should neither eliminate private property nor nationalize all private assets or lands.

Other socialist theorists in Ghana echoed a similar message. They maintained that “the right to use of private property and the pursuance of private enterprise is recognized by all sectors of the community.”[23] The Editorial Board of the Evening News wrote in 1963 : “No doubt a few elements have allowed themselves to be carried away by the dogmatists’ view of what socialism means in Ghana, some are certainly affected by the infantile paralysis of which Lenin spoke years ago, but Osagyefo’s clear-cut message to businessmen must set both the rumor-mongers and adventuring investors’ mind at ease.”[24] On March 2, 1963, an anonymous individual wrote in The New Ashanti Times : “Let us all join with Osagyefo (Nkrumah) in encouraging foreign investors.”[25] C. L. R. James informed an audience in Ghana that Ghana’s policy was “to say to quite frankly to capitalism, particularly, fast capitalism : we need you.”[26]

From the president’s mouth, to the state’s leaders, to the Ghanaian press, to the pro-socialist Ghanaian magazines, and to the black Marxist intellectual circles in Ghana, there was a consensus and understanding that the socialist state had not abandoned capitalism or rejected private enterprise. From the state’s inception, it had acknowledged the important role capitalism, foreign investment, and private enterprise had to play in its socialist reconstruction and in the safeguarding of black freedom. What explains then the complete misrecognition (or deliberate misreading) of Ghana’s political-economic objectives and project ?

The Ghanaian state had grown increasingly frustrated by private companies and foreign investors bursting at their seams to do business in Ghana, requesting that the Ghanaian state pump its own money into private ventures and assume financial liabilities if said ventures collapsed. This undercut the purpose of the state’s push for private investment. Private funds were supposed to flow into Ghana and offset government spending in those sectors, freeing up state finances to invest in essential projects.[27]

Moreover, Ghana’s leaders had concluded that certain economic measures and ventures would function better if they were entirely privately operated, meaning that they needed to make a profit and be self-sustaining entities, or become wholly government owned. The Standing Development Corporation, the entity within the government charged with overseeing Ghana’s state enterprises, had been particularly adamant that the government withdraw itself and its finances from many enterprises.[28]

Consequently, government officials compiled a list of companies it had “invested capital” in and debated whether or not they should sell their share to the private coowner or purchase the private investors’ shares. The goal was to leave “companies free to operate economically as autonomous bodies.”[29] Ghana’s leaders had made it abundantly clear that they were not engaged in the process of nationalization. The state sought to undercut the big myth circulating in late 1961 to early 1962, which, in fact, would have a long afterlife after Nkrumah’s death, that the government was seeking to nationalize the economy. Rather, the Cabinet wished to reiterate the state’s position, that it “did not intend to purchase any existing private commercial businesses.”[30] The state was neither nationalizing private enterprises nor preparing to do so.

[1] TNA, DO 166/12, October 16–18, 1963, Acting High Commissioner in Accra to Ghana Fortnight Summary Distribution.

[2] “Ghana’s President Reviews Progress in Ghana,” The African Chronicler : A Diary of Weekly Events in Africa, Vol. 1, No. 21 (October 3–9, 1963) : 278.

[3] “Our Civic Duty” : Speech by Dr. Kwame Nkrumah at the Opening of the Unilever Soap Factory at Tema on Saturday, August 24, 1963.

[4] For earlier and parallel debates about state capitalism, see M. C. Howard and J. E. King, “‘State Capitalism’ in the Soviet Union,” History of Economic Review, Vol. 34, No. 1 (2001) : 110–126 ; and Marcel van der Linden’s Western Marxism and the Soviet Union (Leiden : Brill Press, 2007). For other discussions on how state capitalism has been perceived and understood by scholars and thinkers across the 20th century, see Andrew Koppelman, “Rawls, Inequality, and Welfare-State Capitalism,” American Journal of Law and Equality, Vol. 3 (2023) : 256–282.

[5] Walter Rodney’s 1975 Speech, “Marxism and African Liberation,” at Queen’s College, New York City, www.marxists.org/subject/africa/rodney-walter/works/marxismandafrica.htm.

[6] James, Nkrumah and the Ghana Revolution, 192.

[7] While I do not address here the scholarship that tackles the precolonial and colonial Ghanaian economy from slavery, to forced labor, to local markets, to merchants, to British trading firms, and so forth, see : Austin, Labour, Land and Capital in Ghana ; Raymond E. Dumett, El Dorado in West Africa : The Gold Mining Frontier, African Labor and Colonial Capitalism in the Gold Coast, 1875–1900 (Athens : Ohio University Press, 1998) ; Hill, Migrant Cocoa Farmers ; Jim Silver, “The Failure of European Mining Companies in the Nineteenth-Century Gold Coast,” Journal of African History, Vol. 22, No. 4 (1981) : 511–529 ; Kwabena Adu-Boahen, “The Impact of European Presence on Slavery in the Sixteenth to Eighteenth-Century Gold Coast,” Transactions of the Historical Society of Ghana, Vol. 14 (2012) : 165–199.

[8] Bob Fitch and Mary Oppenheimer, Ghana : End of an Illusion (New York : Monthly Review Press, 1966).

[9] PRAAD-Accra, RG 7/1/58, June 1, 1961, E. K. Okoh to E. C. Quist-Therson.

[10] PRAAD-Accra, RG 7/1/58, June 28, 1961, E. C. Quist-Therson to the Executive Director.

[11] PRAAD-Accra, RG 7/1/58, “Extract from the Minutes of a Meeting of the Cabinet Held on the 16th February 1962 | Item 4. ‘Statement on Sale of Private Enterprises.’”

[12] Kwame Nkrumah, “Invest in Ghana,” The New Ashanti Times, March 2, 1963.

[13] “We Are All Socialists,” West Africa, April 30, 1979.

[14] “Ghana Is No Satellite of Russia,” The Daily Graphic, July 16, 1963 ; Hoover Archives, Karl August Wittfogel Papers, box 203, folder 203.4, cited in Senator Thomas J. Dodd’s introduction in “Subcommittee to Investigate the Administration of the Internal Security Act and other Internal Security Laws,” “Ghana Students in United States Oppose U.S. Aid to Nkrumah,” August 19, 1963, and January 11, 1964, 3.

[15] “Ghana Is No Satellite of Russia.”.

[16] Nkrumah, “Invest in Ghana.”

[17] “Ghana Invites Investment,” The Daily Telegraph, October 16, 1963.

[18] “Flexibility for Companies,” The Daily Telegraph, October 16, 1963.

[19] “Ghana Concession to Foreign Investors,” Financial Times, October 16, 1963.

[20] PRAAD-Accra, 13/2/95, August 1962, “Report of the Ghana Delegations to the G.A.T.T. Meetings, May–June 1962” by the Minister of Finance & Trade, Trade Division.

[21] X’ray, “Sugar Industrial Complex,” The Spark, November 29, 1963.

[22] The Editorial Board, “Socialist Basis of Ghana’s Economy,” Evening News, February 26, 1963.

[23] Group 6, “Seminar Report on ‘Nkrumaism’” in Seminar Report on “Nkrumahism”, eds. The Convention People’s Party (Cape Coast : Mfantsiman Press, 1962), 40.

[24] The Editorial Board, “Socialist Basis of Ghana’s Economy.”

[25] Anonymous, “Encourage Investment,” The New Ashanti Times, March 2, 1963.

[26] James, Nkrumah and the Ghana Revolution, 170.

[27] PRAAD-Accra, RG 7/1/58.

[28] PRAAD-Accra, RG 7/1/58, May 17, 1961, “Extract from the Minutes of the Special Meeting of the Standing Development Committee Held on 17 May 1961 | Minute 595.”

[29] PRAAD-Accra, RG 7/1/58, June 20, 1961, “Extract from the Minutes of a Meeting of the Cabinet Held on the 20th June 1961 | (ix)” ; PRAAD-Accra, RG 7/1/58, August 28, 1961, AG. P.S. to UN Economist Mr. Franek ; PRAAD-Accra, RG 7/1/58, December 11, 1961, “Government Investment Policy : Draft of Cabinet Memorandum by the Minister of Industries,” by Krobo Edusei.

[30] PRAAD-Accra, RG 7/1/58, “Extract from the Minutes of a Meeting of the Cabinet Held on the 14th February 1962 | Item 12. ‘Purchase of Private Commercial Firms.’”