Sunday, May 14, 2006

Sermon at Christian Aid Week service, Canterbury Cathedral,. May 14th

May the words of my mouth and the thoughts of our hearts be always acceptable in thy sight, O Lord my Rock and my Redeemer

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.

The prophet Amos spots something that still eludes many well-meaning people today. That the root cause of poverty is injustice.

That is particularly topical in a week when our attention turns to world poverty. Giving generously to the needy is no excuse for sloppy thinking about the causes of poverty and what we can do to address them.

It is sloppy thinking, for example, to believe poverty in one place is caused by wealth in another. Take from the rich, give to the poor and the problem is solved. But imagine that a latter day Robin Hood was able to grab the wealth of the world’s rich countries and distribute it evenly among the poor. For a lucky and provident handful, that bounty would catapult them into a life free of poverty. But for most, within a few weeks or months the money would be gone. Some would have gone on consumption. A large part would have been stolen by corrupt officials. But the root cause of poverty—the crippling handicaps of bad roads and ports, poor education, low skills and above all injustice, would remain. Redistribution destroys wealth in one place, but only rarely creates it in another.

As Amos sees so clearly, it is injustice that perpetuates poverty, by preventing wealth-creation. The Peruvian economist Hernando de Soto is a latter-day Amos. His book on the mystery of capital explains with convincing clarity how abuse of property rights by the powerful and corrupt prevents the poorest people in the world—subsistence farmers and slum-dwellers—from getting onto the first rung of the wealth-creating ladder. When you have no tradable title to your property, you can’t use it as collateral for a loan; you can’t turn it into money if you want to move. You are also unlikely to invest in it: what is the point when a corrupt official or a powerful neighbour can come and take it away. In short, thanks to injustice, you are stuck.

The same applies to enforceable contracts. Without clean quick cheap courts, the crucial promises that are the foundation of business life and wealth-creation mean little. Without enforceable contracts there is little to stop the rich and powerful ripping off the poor and weak. Debts are uncollectable; assets unprotectable. The huge advantages of credit and bulk buying that businesses in the west take for granted are all but impossible.

The lawless environment of the developing world would have been instantly recognised by Amos. He railed against “corruption in the gate”. The gates, those days, were the law-courts—but the gate has another meanting too. You had to pass through the gate to bring goods to market. And the poor and powerless were at the mercy of corruption there too. Small businesses in the developing world face just the same regime from port officials, tax inspectors and policemen today.

Amos also attacks the way in which the rules of religious holidays are used to put the poor at a disadvantage, and he condemns those who fiddle weights and measures to cheat the poor.

Hear this, you that trample on the needy,
and bring to ruin the poor of the land,
saying, “When will the new moon be over
so that we may sell grain;
and the sabbath, so that we may offer wheat for sale?
We will make the ephah small and the shekel great,
and practice deceit with false balances,

The glory of technology and capitalism means that a cheap and accurate pair of scales is now affordable even to the poorest trader in a developing country. But fiddling with the value of money still goes on. Inflation and non-convertible currencies are another, grossly unjust, tax on the poor. For the rich and powerful, it is no problem to keep their money in hard currencies and foreign bank accounts. For the weak and poor, the lack of a safe way to save is yet another burden.

There are more injustices. Even when a third-world business has managed to accumulate capital, find workers with the necessary skills, develop a product or service that adds value and creates wealth—what do they find? That the doors of the richest markets in the world are closed to them. Protectionism is the ultimate institutionalised selfishness of the rich and lazy against the poor and hard-working. In the gates of the rich world, the poor are turned away in a manner that Amos would have found all too familiar.

The poverty lobby is to be commended for having, belatedly, grasped the importance of trade and the evils of rich-world protectionism. Christian Aid week will be a good opportunity to renew calls on the rich world to open the gates of trade.

But rich-world protectionism is only part of the problem. It is a tragedy that anti-poverty campaigners in the west have allowed themselves to be conned by the self-interested protectionist arguments of rich people in poor countries. Protecting the corrupt, incompetent and uncompetitive producers and providers of goods and services in poor countries levies yet another tax on people who are least able to pay.

The best way for poor countries to get rich is to trade more, not less, and poor people above all need the best goods and services at the lowest prices.

The good news, perhaps rather undercelebrated, is that since Amos’s day we have gained a much better idea of how wealth is created. It is quite wrong, as Nelson Mandela asserted last year in a speech of uncharacteristic foolishness, to say that “like slavery and apartheid, poverty is not natural. It is man-made”

On the contrary, poverty is all too natural. Poverty is where we all started. Barely an eye’s blink ago in evolutionary terms, having a nice flint axe and a dry cave was the summit of human material ambition.

Modern prosperity, by contrast, is not natural, but the result of specific institutions and habits. It is not just recent, but fragile—like water flowing downhill, wealth trickles away unless it is well husbanded. The good news is that we now know the principles of that husbandry. The bad news is that so many of us are too muddle-headed to preach them and practice them.

There is no example of a country where trade, competition, and the rule of law have not brought prosperity. Sadly, there are all too many examples on the other side: bad government, the favouring of elites, protectionism and monopoly all entrench poverty.

But perhaps the biggest lesson of the past decades is that there are no short cuts to prosperity. Much of the economic advice given to poor countries in recent years by the anti-poverty lobby has turned out to be tragically wrong-headed. Very rich countries may have the people and money necessary to run a big government. Poor countries certainly don’t. Rich countries can afford to squander money protecting treasured industries. In poor countries, state intervention in the economy has been a uniform disaster. Even in education, the uncomfortable truth is emerging, as research by James Tooley of Newcastle University shows, that for-profit private schools, even charging the tiniest fees, educate children far more effectively than the free ones run by the state.

These truths often seem very jarring to people in rich countries. It is not fashionable—putting it mildly—in polite Christian society, to celebrate the wondrous, glorious wealthcreating processes of global capitalism. The extraordinary way in which hundreds of millions of people have emerged from poverty in the past two decades thanks to the way in which India and China have embraced capitalism and global trade is lost amid worries about the ultimately secondary question of inequality, and perhaps even more so, amid a distaste for wealth.

Yet this should be as incomprehensible as a Christian distaste for the laws of physics.

The refusal to recognise the way wealth is created leads to a very damaging conflation of private generosity with public policy. The overwhelming lesson of five decades of third-world aid is that when aid money is paid from taxation, it takes money from poor people in rich countries and gives it to rich people in poor ones.

If Christian Aid week’s message goes beyond our own generosity to questions of public policy, it should be not a demand for redistribution. It should not be for headline-catching gimmicks. Instead it should match stern condemnation of injustice in the rich and poor worlds alike, with enthusiastic support for faster growth in the world economy—and particularly of the developing world’s share in global trade.

But that will mean shedding the foppish disdain that many in the rich world show for the causes of their own good fortune. In particular, many Christians’ political and economic outlook is riddled with guilt and sentimentality. Rather than grapple with the real causes of both wealth and poverty, it is so much easier to follow the feelgood route of trivial or counterproductive gestures.

Amos had something to say about that too. In a world riddled with corruption, 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;
and the offerings of your fatted animals
I will not look upon

In the name of the Father, the Son and the Holy Ghost, Amen

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