PeruCrew
Saturday, March 13, 2004
 
Sorry for the long hiatus. Let me warn you right now. This post is going to be long. But if you take the time to read it all I hope it will be very informative and thought provoking. Let me also put a little disclaimer that it could very well challenge some viewpoints that you have and be a bit controversial. That is okay. My opinions here are just that...my opinions (and those of the Economist Magazine). Feel free to disagree (and please log your disagreement in the comments below the post!).

Ok, to the meat of the post... I just read perhaps the best article I have ever read in my life by the Economist Magazine, a periodical that I heartily recommend for those of you interested in economic related matters and poverty. I just finished a weeklong training with Food for the Hungry and the article I am going to discuss, talks quite nicely about some of what the training was about. Namely, what are the main root causes of poverty? How is it possible for there to be such acute, abject, and unbearable poverty at the same time such wealth in the developed nations? As citizens of the wealthiest country the world has ever seen, we ought to be asking ourselves questions like this. Certainly I, as a follower of Christ, ought to be thinking about this. Jesus was very much concerned with the poor of his time and spent the bulk of his ministry with the poor and those outcast from society. Just read the book of Luke.

So what are we as the wealthy to do? (And no matter how cash strapped you are at the moment, if you are reading this post from the United States, trust me, you are comparatively wealthy on a global scale.) Growing up, I always thought that the solution to poverty was wealth redistribution. We are rich, they are poor, and furthermore, they are poor because we are rich, so we should give them some of our money. This article from Economist magazine challenges this worldview and implicitly challenges us to think and act differently about poverty. I have also taken the liberty of editorially bolding parts of the article. Please do not stop reading this until you have read my comments AFTER the article.


A question of justice?

Mar 11th 2004
From The Economist print edition


The toll of global poverty is a scandal. But deploring economic "injustice" is no answer


HUNDREDS of millions of people in the world are forced to endure lives of abject poverty, poverty so acute that those fortunate enough to live in the United States, or Europe or the rich industrialised parts of Asia can scarcely comprehend its meaning. Surely there is no more commanding moral imperative for people in the West than to urge each other, and their governments, to bring relief to the world's poorest. And what a tragedy it is, therefore, that many of the kind souls who respond most eagerly to this imperative bring to the issue an analytical mindset that is almost wholly counterproductive. They are quite right, these champions of the world's poor, that poverty in an age of plenty is shameful and disgusting. But they are quite wrong to suppose, as so many of them do, that the rich enjoy their privileges at the expense of the poor; that poverty, in other words, is inseparable from a system, capitalism, that thrives on injustice. This way of thinking is not just false. It entrenches the very problem it purports to address.

Symptomatic of this mindset is the widespread and debilitating preoccupation with "global inequality". Whenever the United Nations and its plethora of associated agencies opine about the scandal of world poverty, figures on inequality always pour forth. (Such figures, though, are always higher than the likely reality: see article) It is not bad enough, apparently, that enormous numbers of people have to subsist on less than a dollar a day. The claim that this makes in its own right on the compassion of the West for its fellow men is deemed, apparently, too puny. The real scandal, it seems, is that much of the world is vastly richer than that. The implication, and often enough the explicit claim, is that the one follows from the other: if only we in the West weren't so rich, so greedy for resources, so driven by material ambition "such purblind delinquent capitalists" the problem of global poverty would be half-way to being solved.

Certain ideas about equality are woven into the fabric of the liberal state, and quite inseparable from it: first and foremost, equality before the law. But equality before the law, and some other kinds of liberal equality, can be universally granted without infringing anybody's rights. Economic equality cannot. A concern to level economic outcomes must express itself as policies that advance one group's interests at the expense of another's. This puts political and ethical limits on how far the drive for economic equality ought to go. (Strictly practical limits, as well, since too noble a determination to take from the rich to give to the poor will end up impoverishing everyone.) It also means that perfect economic equality should never be embraced, even implicitly, as an ideal. Perfect economic equality is a nightmare: nothing short of a totalitarian tyranny could ever hope to achieve it.

The preoccupation bordering on obsession with economic equality that one so often encounters at gatherings of anti-globalists, in the corridors of aid agencies and in socialist redoubts in backward parts of the world reflects a "lump of income" fallacy. This remarkably tenacious misconception is that there is only so much global income to go around. If the United States is consuming $10 trillion worth of goods and services each year, that is $10 trillion worth of goods and services that Africa cannot consume.

But goods and services are not just lying around waiting to be grabbed by the greediest or most muscular countries. Market economics is not a zero-sum game. America consumes $10 trillion worth of goods and services each year because it produces (not counting the current-account deficit of 5% or so of the total) $10 trillion of goods and services each year. Africa could produce and consume a lot more without America producing and consuming one jot less. It so happens that the case for more aid, provided of course that it is well spent, is strong, but the industrialised countries do not need to become any less rich before Africa can become a lot less poor. The wealth of the wealthy is not part of the problem.

To believe otherwise, however, is very much part of the problem. For much of the 20th century the developing countries were held back by an adapted socialist ideology that put global injustice, inequality and victimhood front and centre. Guided by this ideology, governments relied on planning, state monopolies, punitive taxes, grandiose programmes of public spending, and all the other apparatus of applied economic justice. They also repudiated liberal international trade, because the terms of global commerce were deemed exploitative and unfair. Concessions (that is, permission to retain trade barriers) were sought and granted in successive negotiating rounds of the General Agreement on Tariffs and Trade. A kind of equity was thus deemed to have been achieved. The only drawback was that the countries stayed poor.

Towards the end of the century, many developing countries, China and India among them, finally threw off this victim's mantle and began to embrace wicked capitalism, both in the way they organised their domestic economies and in their approach to international trade. All of a sudden, they are a lot less poor, and it hasn't cost the West a cent. In Africa, too, minds are now changing, but far more slowly. Perhaps that has something to do with the chorus that goes up from Africa's supposed friends in the West, telling the region that its plight is all the fault of global inequality, "unfair trade" and an intrinsically unjust market system.

People and their governments in the West should heed the call of compassion, and respond with policies to help the world's poor, and indeed to advance the opportunities of the (much less desperately) poor in their own countries. Expressed that way, the egalitarian impulse is a good thing, worth nurturing. But a compassionate regard for the poor, as any good Marxist will tell you, is a very different thing from a zeal for economic "justice". That zeal, despite the exemplary fate of the socialist experiment at the end of the 20th century, guides a great deal of thinking still. And it continues to do nothing but harm.



Mark's Editorial:

So what does this article mean? Let me start off with one thing it does not mean. First and most important, it in no way lessens the call that the rich have to eradicate poverty. But it does have huge implications on HOW we deal with poverty. The Bible is clear that to whom much is given, much is expected. Simply by the virtue of the resources God has given us, much is expected of us. If I thought that I, as a Christian, was not called to be working with the poor, I certainly would not be here in Peru. So please do not think that I am in any way advocating the complacency towards poverty that permeates many segments of the Christian church in America. If you have never thought about what it must be like to have to choose between sending your 8 year old daughter to school or sending her out on the streets to beg or sell candy, then you need expand your views of the world. Or if you have never tried to imagine what it must be like to have to choose between putting food on the table or buy medicine for your ailing child, then you need to be exposed to the life that billions of people lead.

I realize the economic jargon of this article is a bit of a pain to muddle through, but the core point expressed is critically important and should impact our notions of poverty. It is basically stating that the amount of wealth in the world is not fixed and that more can be created. The traditional viewpoint that has dominated the industry I am working in now (International Development) is that there is a fixed amount of wealth. An easy analogy of what I am arguing against is a pie. The traditional viewpoint has been that there is a certain amount of wealth out there (the pie) and it cannot change. Therefore, since I am concerned about the poor, I should be working to carve up the pie differently. Give bigger pieces of the pie to the poor and smaller pieces to the rich. The alternative view I am advocating is that of a pie without edges that can grow infinitely. In this scenario, what is the best way to help the poor? Help them to make the pie bigger themselves.

To eradicate poverty we are going to have to do something different than simply transferring wealth from the rich to the poor. In fact, many times development aid if done poorly, does more harm then good by creating dependence. That is basically what many (not all) international relief and development agencies have been doing for the last 50 years and it hasn't helped. Africa and Haiti are painfully clear examples. So if you agree with this article and what I am saying some pretty difficult questions are raised. If there are nearly infinite resources waiting to be discovered, why are the poor still poor? What am I to do to help eradicate poverty if simply giving money away does not work?

Poverty still exists for a myriad of complicated reasons. Anybody who tries to tell you that the answer to poverty is simple is not operating on all thrusters. Some who are strong believers in market capitalism will say to just ignore the poor and let the market sort things out. I am certainly not advocating that. And I do not think the article goes into enough detail about injustices perpetrated by rich countries. There is economic injustice out there and we as Christians should be the loudest advocates against it. Tariffs in rich countries make products from poor countries unaffordable. Also, did you know that the average European cow is subsidized to the tune of well over $1 every day? That is more money then over 1 billion people in the world earn. Farm subsidies in rich countries are a form of economic injustice that reinforces poverty in the third world. How? By paying our farmers it allows them to sell their products cheaper than their real market value. Poor farmers in the third world cannot compete with the subsidized products. But the simple fact is that while these economic injustices do make it harder for the poor to climb out of poverty, they are not the primary reasons why the poor are still poor. And advocating against the whole world economic system in favor of some utopic socialist system will do nothing for the poor but keep them poor. The only way formerly poor countries such as Japan and South Korea have climbed out of poverty has been through expanded integration into the world economy. This is also how China and India are rapidly growing their economies and improving the standard of living of over 2 billion of the world's poor. My heart aches everytime I read about well intentioned demonstrators protesting against trade and globalization since it is the only path we know of that actually works for lifting poor countries out of poverty.

There are other very large factors that breed poverty that are out of the scope of this ever lengthening editorial such as government corruption. I will be able to speak more authoritatively after my two years here in Peru, but from the experience of Food for the Hungry (the organization I work with) perhaps the biggest single cause of poverty is poverty of the mind, not poverty of resources. One's worldview has a tremendous impact on how one lives one's life. It is often tempting, as a Christian, to just concentrate upon spiritual issues and think that once someone becomes a Christian their mind will be transformed and they will stop beating their wife, start working hard, quit drinking contaminated water because it is more convenient, keep their kids in school, stop gambling and drinking away what little money that they have, etc... God can and does miraculously transform peoples minds, but all too often Christian missionaries come into a community and work on converting as many people as possible then leave. Their success metric is saved souls, not transformed lives. What happens is a failure to disciple people after they convert and their worldview doesn't change. Rwanda is the tragic case that breaks my heart to cite. Did you know that well over 75% of people in Rwanda professed to be Christians in 1994? In 1995 the worst genocide that the world has seen since Pol Pot occurred in Rwanda with hundreds of thousands left dead in a "Christian" country.

Eradicating poverty involves changing how people think. Often times the proverb is quoted, "give a man a fish and he has food for a day, teach a man to fish and he has food for a lifetime". Darrow Miller, a VP at Food for the Hungry as well as author of the book Discipling the Nations, takes this proverb one more step when he said "teach a man to think about fishing". So it is not enough to just teach narrow technical skills, one must change how someone sees the world, and their role in it. As an example of a destructive worldview, many people who come out of an Animistic belief system are very fatalistic. "I was born poor. My parents were poor. And I will always be poor. That is my lot in life." This fatalism is an incredibly destructive worldview which impedes development. "Machismo" in many Latin American countries is another destructive belief. It leads men to treat women as objects and often women are abused or left with young children. Women are expected to have kids when they are young and often times education is not valued for women. What happens as a result of this? Poverty. This is not to say that if people would just change how they think they would instantly pull themselves out of poverty and be wealthy. It is a painfully slow process.

If you made it to here, thanks. I got a little out of control there. But this is what gets me up in the morning. God does not want people to be poor. Poverty is not part of God's plan for the world. We should be doing everything we can to eliminate poverty, not prolong it by creating dependency and feeding a destructive victim mentality. Sometimes the call to do something means giving sacrificially of our resources, but we must take seriously the responsibility to analyze how and where we are giving our resources and how they are being used to eliminate need. In the big picture the poor are not poor because of a lack of material resources, they are poor for a number of different reasons, not least of which is their beliefs and worldview. So the call is to engage poverty, not sit back and pretend it doesn't exist or, even worse, throw money at it indiscriminately. All development work is not created equal. So you should be asking me what Food for the Hungry is doing to prevent dependency and promote a healthy worldview in the communities it is working in.

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