Monday, May 15, 2006

More on poverty & Christianity--this time an oped piece in the London Times

The starving at the West's gate

The reason for Third World poverty was already obvious centuries ago. Just ask Amos

CHRISTIAN AID WEEK is rightly a time for warmheartedness. But that is no excuse for softheadedness. It is sloppy thinking, for example, to believe poverty in one place is caused by wealth in another. To share the wealth of the rich world evenly among the poor would temporarily dent poverty, not end it. Redistribution invariably destroys wealth in one place; it rarely creates it in another. The redistributed money would mostly go on short-term consumption or be stolen by corrupt officials. The root cause of poverty, above all injustice, would remain.

Hernando de Soto, the Peruvian economist, has shown convincingly how abuse of property rights by the powerful and corrupt prevents subsistence farmers and shantytown dwellers from getting on to the first rung of the wealth-creating ladder. No property rights mean no collateral for loans, no mobility and no investment.

That still eludes much of the anti-poverty lobby. But the prophet Amos, writing three millennia ago, clearly spotted the link between poverty and injustice. For I know how many are your transgressions, and how great are your sins — you who afflict the righteous, who take a bribe, and push aside the needy in the gate.

Without enforceable contracts, the rich and powerful are free to plunder the poor and weak. Debts are uncollectable; assets unprotectable. When Amos mentioned those who “push aside the needy in the gate” he was referring chiefly to law courts but also the route to markets in towns and cities, where the poor and powerless were at the mercy of corrupt gatekeepers. Third World small businesses on the way to market suffer similarly from corrupt bureaucrats and policemen today.

Technology and capitalism now have made cheap and accurate weighing scales widely affordable, ending one of the most common ways in which the poor are cheated. But the grossly unjust taxes imposed by fiddling with money, through inflation and non-convertibility, continue. The rich and powerful can use hard currencies and foreign bank accounts; for the weak and poor, the lack of a safe way to save is yet another burden.

Even those Third World businesses that manage to put capital and labour together to develop a product that adds value and creates wealth find that the gates of the richest markets are closed. Protectionism is the ultimate institutionalised selfishness of the comfortably-off against the poor and hard-working.

The anti-poverty lobby has understood the importance of trade shamefully late and partially. Christian Aid Week will bring new calls on the rich world to open its gates. But, tragically, anti-poverty campaigners in the West have allowed themselves to be conned by the protectionist arguments of rich people in poor countries. The protection of corrupt, incompetent and uncompetitive producers and providers of goods and services in poor countries levies yet another tax on the weakest. Yet the poor above all need the best choice of goods and services at the lowest possible prices.

Nelson Mandela said last year in a speech of uncharacteristic foolishness, that “like slavery and apartheid, poverty is not natural. It is man-made.” Actually, poverty is all too natural: not so long ago a nice flint axe and a dry cave was the summit of human material ambition.

Since Amos’s day it has become pretty clear how wealth is created. There is no example of a country where trade, competition and the rule of law have not brought prosperity. Bad government, the favouring of elites, protectionism and monopoly all entrench poverty. Modern prosperity is the result of specific institutions and habits. But like water flowing downhill, wealth trickles away unless it is well husbanded.

Polite Christian society does not celebrate the wondrous wealth-creating processes of global capitalism. It winces at them. Worries about inequality (ultimately a secondary question to poverty) and, worse, a distaste for wealth, eclipse the extraordinary way in which the embrace of capitalism and global trade in India and China have lifted hundreds of millions of people from poverty in the past two decades.

This anti-capitalist attitude is as absurd as a Christian distaste for the laws of physics. It also leads to a very damaging conflation of private generosity with public policy. The overwhelming lesson of five decades of Third World aid is that, paid from taxation, it takes money from poor people in rich countries and gives it to rich people in poor ones.

Christian Aid Week should shun gimmicky slogans such as “make poverty history” and “drop the debt”. Instead, it should match stern condemnation of injustice in the rich and poor worlds alike with enthusiastic support for faster growth, more competition and freer trade.

Yet many Christians’ political and economic outlook is riddled with guilt and sentimentality, and a foppish disdain for wealth. Rather than grapple with the real roots of poverty, trivial or counterproductive gestures such as buying “fair trade” (more accurately described as “fraud trade”) products seem all too tempting. Amos had something to say on that too: he denounced the way in which rich people avoided dealing with injustice by offering conspicuous public sacrifices instead. Even though you offer me your burnt offerings and grain offerings, I will not accept them.

Edward Lucas writes for The Economist; this article is based on a sermon he gave at the Christian Aid Week service in Canterbury Cathedral yesterday


bokanon said...

Well, you could add that already Marx said they freedom means nothing without property rights. That is likely to carry authority for your median polemist.

Just curious, why fair trade is fraud trade? Never believed in its efficiency, but why is it worse than ineffective?

Edward Lucas said...

Because it enriches supermarkets and food manufacturers under the guise of charity
It is much better to give money directly for anti-malaria nets, schools and other things that are PROVEN to work, rather than thinking that having a few pennies (out of pounds spent) going to coffee growers will make a difference