Socialist Solutions to World Poverty

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Socialist Solutions to World Poverty

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From the print edition of The New American:

The almost complete failure of world aid programs to solve world poverty isn’t really a secret — or a partisan issue: Two celebrated left-wing world poverty specialists, Francis Moore Lappé and Joseph Collins, lambasted world aid.

In their book World Hunger: Ten Myths, the two point to specific failures of international aid programs.

They examine whether bilateral aid (aid given from one country to another country, instead of going through an international agency) is really meant to help the poor — it’s not — and whether the aid America gives is effective — it’s not. They also note that the country that gets the most U.S. aid — Afghanistan — has 59 percent of its children stunted because of malnutrition.

The authors note that aid is more meant to be a payoff to favored Americans than tangible help for those starving in other countries: Instead of the United States giving cash to needy countries to buy rice, we give the countries American-grown rice, which is much more costly than the rice that could be purchased in the countries of need. (Of course, in sending cash donations, we’d have to trust the receiving governments to use the cash in a manner that we want them to, which is an idea that should have long ago been demolished, as countless billions of dollars in U.S. cash disbursements to Afghanistan have simply disappeared in that country, with whole pallet-loads of donated currency simply being carted away to places unknown.)

Putting an affidavit of truth to the authors’ claims is the fact that when the costs of food on world markets are high, and increased food aid is needed in the poor parts of the world, American food aid dries up because we sell the foodstuffs we produce, rather than have the U.S. government buy them from U.S. farmers to donate to other countries. So when the need for food aid is high, and poor people cannot afford to buy what they need because supplies are low, America donates less, not more. Then, too, “Overall, according to Oxfam America, almost 60 percent of U.S. food-aid dollars goes to shipping and other overhead costs, while only 40 percent is spent on food.” Food aid shipped from the United States takes “on average 147 days to reach those in need, whereas food procured locally took on average just 35 days.” Making a bad situation worse, when the food aid does arrive, it often puts many small farmers out of business in the recipient country, making them part of the permanently impoverished. Haiti, after the 2010 earthquake, was the example given: American rice shipments put out of business rice producers and sellers in that country, and aid became chronic.

The reason rice markets were glutted in Haiti: The two agencies in charge of the U.S. food aid programs — USAID and the USDA — “often neglect to sufficiently assess local markets beforehand in order to help avoid food aid’s potentially adverse impact on local farmers.”

Meanwhile, the authors note, “about 800 million people, or roughly one-ninth of the world’s population, are hungry.” They quote the United Nations Food and Agriculture Organization, emphasizing the magnitude of the hunger problem many decades after public aid began its war on poverty: Every day chronic “hunger and its related preventable diseases kill as many as eight thousand children under the age of five. That’s roughly three million children each year.”

(Here, in rebuttal, advocates of public aid programs would likely claim that aid has caused a dramatic decrease in both the percentage of the world’s poor and in the absolute numbers of the world’s poor, even as the world’s population has climbed. However, that ignores the fact that most of that decrease in world poverty was caused by China’s and India’s economic development — not aid, per se — and that the poverty rate being measured equates to about $1.90 per day, which isn’t much to live on.)

The Mainstream “Fix” for Aid Programs

Most poverty experts agree that world aid programs haven’t worked, but most say “fix them,” rather than “replace them.” Some are for small tweaks to the present system, while others want a complete makeover. “Fixing” the international aid system, however, is undoubtedly futile.

The mainstream, globalist view — forwarded by the small-tweaks crowd — is reflected in the advice of economist Jeffrey D. Sachs, who says in his book The End of Poverty, “At the most basic level, the key to ending poverty is to enable the poorest of the poor to get their foot on the ladder of economic development.” Virtually no economist would disagree with that assessment, as far as it goes.

Sachs is widely considered “the poverty economist,” as he has found his way to advising numerous countries about how to get their peoples out of abject poverty, and he was put in charge of Columbia University’s Earth Institute, which claims to be   using the best minds to solve poverty and environmental problems.

He claims that, contrary to what many conservatives claim, merely supplying economic freedom and laws protecting private property to a country does not automatically lead to prosperity for the masses. He says that a handful of African countries have tried to go that route without success. (He didn’t list any of those countries, however, probably because even African countries that claimed adherence to economic liberty failed to actually provide it.) The problem, he says, is that not only must the type of government and the nature of a country’s laws be considered, but also other aspects about a country that act to deter progress, such as weather, transportation, disease, etc. Unless roadblocks to economic success are removed, the poor countries will not prosper — and poverty will rule.

Consider, for one example, missing infrastructure. Sachs tells about a road that “connects the port at Mombasa, Kenya, with the landlocked countries Uganda, Rwanda, and Burundi. The transport costs on this road are extremely high because the road is in very poor condition on various stretches. From time to time, transport is disrupted entirely when the rains wash away bridges and sections of the road.” Theoretically, the road, which serves more than 100 million people, could be used to ship goods to markets in population centers, so the natives could make money if a few laws were changed, but that’s not the case in reality. There are too many roadblocks to wealth in the way — both figuratively and literally. Many villages don’t own a truck to ship goods; many times the road is out altogether, prohibiting shipping (which would be absolutely devastating if shipping perishable goods); gasoline is often hard to come by and is often so adulterated with additives by natives to stretch the supply that engines quickly get ruined; there often aren’t safe places to pull over and rest for the night; and more. He adds, since the governments there cannot afford to fix the road to an acceptable minimal standard — making it useful to move goods to market — outside help is needed to allow the populations to prosper.

He sees many such roadblocks to success in countries with endemic poverty that need to be overcome to allow the poverty-stricken to find success. For instance, in many African communities, there are few men or women in the 20- to 40-year-old range because of deaths owing to AIDS and malaria, so there aren’t prime working-age adults to do necessary work, and the old people who remain are already overwhelmed trying to take care of parentless youngsters. And these roadblocks not only might stop natives from improving their situation, the problems might be so overwhelming that capital formation not only slows, but reverses — with the available capital in the country going down each year.

Moreover, Sachs says, if for any reason usable capital in a country goes down each year — not up — it is indicative that the populace as a whole has entered a death spiral from which it is unlikely to ever resurrect itself, even given strong property rights and economic freedom.

Here is how he lays the problem out: Assume a populace is so poor that it cannot save money, with individuals making an average annual income of $300 per person. The people live hand to mouth, consuming all of their earnings. As time passes, this populace will get inevitably poorer, not wealthier, despite laws to aid business endeavors.

Average individual wealth goes down and down for several reasons. First, the average wealth of the citizens of that country would trend downward because of capital depreciation (perhaps machinery or tools wear out) — since the people there eat away all their earnings, they don’t have money to replace the equipment. Second, the wealth that is produced must usually be spread among more and more citizens as the populace grows — for instance, one mother and father must often divide their wealth among numerous children. Through an increasing population, each year the average member of the society becomes more impoverished, more hungry, more desperate. Third, since many rural African communities are agrarian-based and the families till the same plots of land year after year, the nutrients in the soil become increasingly diminished, leading to smaller and smaller yields.


This article appears in the September 7, 2020, issue of The New American. To download the issue and continue reading this story, or to subscribe, click here.

Courtesy of The New American