The Nigerian businessman sitting opposite me had the power to make millions. I’d flown in from London to negotiate a cement contract with him. His office at the port of Lagos was completely bare except for a desk and two chairs. On the desk was a single book with a familiar yellow and black cover. The title of the book was Teach Yourself Business. It didn’t matter at all that this man, a tribal chief, didn’t have the slightest clue about business and wasn’t afraid to let you know it. All that mattered was that in a corrupt society, without a proper legal system, he had the power to make things happen.
When Mart Laar became Prime Minister of Estonia at the age of 32 in 1990 his country was in a similar position to Nigeria, utterly corrupt with a broken economy. Inflation was running at 1,000%, unemployment was 35%. Mart Laar had only read one book on economics, which was Milton Friedman’s Free to Choose, and the only reason he’d read it was because the communist authorities had banned it and he’d heard that Milton Friedman was a hate figure to them. He said:
“I was so ignorant at the time that I thought that what Friedman wrote about the benefits of privatization, the flat tax and the abolition of all customs rights, was the result of economic reforms that had been put into practice in the West. It seemed common sense to me and, as I thought it had already been done everywhere, I simply introduced it in Estonia, despite warnings from Estonian economists that it could not be done. They said it was as impossible as walking on water. We did it: we just walked on the water because we did not know that it was impossible.”
He not only cured all the country’s economic problems, he allowed banks which had been infiltrated by the Mafia to fail, so that when the banking crisis happened Estonia was unaffected. Estonia became known as the Baltic Tiger.
Today is the centenary of Milton Friedman’s birth. I’m sure that many people in Estonia will be raising a glass to him. Meanwhile, in Nigeria, that copy of Teach Yourself Business will be yellowing in the in-tray in the still-bare office.