G8: Robin Hood Economics

Published on 14th June 2005

The rabbi from Nazareth, lacking even an undergraduate degree, assured us \"The poor you will always have with you.\" Jeffrey Sachs, on the other hand, with a Ph.D. (among other degrees) from Harvard, knows better. We will have the poor with us until 2025. At that time, says Sachs, and his fellow advisers, poverty will be eliminated. But only if we follow his plan.

Professor Sachs is head of the U.N. anti-poverty effort, and lead author of a report presented to the United Nations on the elimination of poverty. He gave the report – all 13 volumes of it – to U.N. Secretary General Annan recently, who proclaimed it an important contribution to the debate on meeting the U.N. goals, which, of course, are \"eminently achievable.\"

I haven’t read the report – not even a single volume – but the news articles about it make its basic strategy pretty clear: you find people with money, take it away from them, and give it to the poor. Understood, of course, is that the administrators of the plan, and their myrmidons, must be supported well if they are to oversee this project. All of this is not remotely lawful, but noble enterprises can’t be impeded by a bunch of outdated laws.

Of course, it’s got to be done with panache. You don’t simply give a bunch of goons bags and guns and tell them to collect the loot. Such a heavy-handed approach would surely meet with resistance. Rather, you have countries give the aid. This works because people never think of countries in the same way as Professor Sachs and his buddies at the U.N. think of them. People think of countries as geographical areas where folks live and work. The world’s economic planners, however, think of countries as governments; i.e., cabals of powerful individuals who regard the people and their property as their own, to regulate, limit and control (those are synonyms for govern) as they will.

Thus, it can be claimed that, in 1970, the world’s countries agreed to fork over 7% of their gross national income for development assistance. Moreover, that figure was approved by a U.N. conference in Mexico, in 2002. That makes it pretty official! But not at all un-official. Nobody asked me, for instance, or you. I don’t recall a vote on the matter in this great democracy of ours. So when Professor Sachs calls for the richest countries, such as the U.S., Japan, and Germany, to honor their pledge, he’s calling for their rulers to use whatever force is necessary to take the funds from producers and distribute them according to his plan. \"From each according to his ability,\" Who said that, again?

He calls the money thus seized and spent \"investments.\" Of course, many American companies are heavily invested in the Third World, providing jobs for thousands of the poor; but this isn’t the sort of investment the professor speaks of. He wants the money given away to build schools, water plants, power plants, better roads, and health facilities. These are necessary because, according to his report, a billion people live on a dollar a day, or less, have life expectancy of about half of ours, and suffer all sorts of illnesses, such as malaria, which, according to the report, kills 150,000 African children monthly. Of course, this threat could be virtually eliminated by spending a comparative pittance on DDT, but this is not a politically correct solution. Dr. Sachs would prefer to provide \"bed nets,\" on the assumption, I guess, that mosquitoes only bite at night in Africa.

Let’s speculate for a moment: suppose that, somehow, the incomes of those billion people living on a buck or less a day doubled. Two bucks a day! What would be the result of such a windfall? I don’t think anyone, including Professor Sachs, can answer that question, but it’s a near certainty that there would be economic upheaval in the affected countries. For one thing, supplies of food would probably vanish, having been bought up by the first lucky souls to get their hands on that extra dollar. Food prices would explode. Shortages would appear. Whoops! Quick: a new plan and more money!

Suppose better roads were built. In Africa, we toured Kenya on roads built by Italian prisoners of WWII. They obviously had not been maintained. Our driver sometimes drove off-road because the roads were less passable than the bush. Simply building roads, because it’s possible to do so, isn’t a good long-term plan. Electricity? Sure, but who has electrical appliances to use the power generated. Hospitals? Where will the doctors and nurses come from? Will there be sufficient revenue to support these things once established? Well, if not, there’s always plan B.

I recall seeing fields of crops that were irrigated by rickety-looking water wheels powered by pedals. In this day and age! I said to my wife, \"Why doesn’t somebody give them a gasoline powered pump?\" With the common sense common to females she asked, \"Where would they get gasoline?\" (Not to mention spark plugs, oil, etc.) And who would maintain and repair the engines? And were there men who earned all or part of their income pedaling those water wheels? What would become of them?

It’s easy to sympathize with the plight of the wretched poor. It should be recalled, however, that our comparisons are made from a position of wealth that most of them cannot imagine. There may be a billion souls living on a dollar or less daily, but the important point, it seems to me, is that they are able to do it. Perhaps we need to learn from them what is important and what isn’t. But the improvement of society must be a gradual thing. Simply dumping millions of stolen dollars into the pot is bound to cause as many problems as it solves, especially if done by persons who have never met a payroll or run a business.

No doubt many of the problems of the poor in the Third World are the direct results of actions taken by their rulers. Perhaps a solution to world poverty might be not to provide more dollars, but less government. If we would make the wretchedly poor richer, we must first make them free!


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