Wednesday, July 06, 2005

Charity's fine, subscribe to mine; get out and pick a pocket or two

Here's something neat: A remarkably reasonable Kenyan economist stands athwart the pointless juggernaut of feel-good western aid to Africa, and yells "Stop!" Really, a great read; he gives example after example of how destructive no-strings-attached cash, food and durable goods are to Africa as a whole to a stunned interviewer from Germany's Der Spiegel, but I think this one sums up the problem best: SPIEGEL: In the West, there are many compassionate citizens wanting to help Africa. Each year, they donate money and pack their old clothes into collection bags ... Shikwati: ... and they flood our markets with that stuff. We can buy these donated clothes cheaply at our so-called Mitumba markets. There are Germans who spend a few dollars to get used Bayern Munich or Werder Bremen jerseys, in other words, clothes that that some German kids sent to Africa for a good cause. After buying these jerseys, they auction them off at Ebay and send them back to Germany -- for three times the price. That's insanity ... SPIEGEL: ... and hopefully an exception. Shikwati: Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livlihoods [sic]. They're in the same position as our farmers. No one in the low-wage world of Africa can be cost-efficient enough to keep pace with donated products. In 1997, 137,000 workers were employed in Nigeria's textile industry. By 2003, the figure had dropped to 57,000. The results are the same in all other areas where overwhelming helpfulness and fragile African markets collide. Every appeal to charitable intent I've seen lately seems to be predicated on the immediate day-to-day costs faced by the poorest Africans, in sums purposely highlighted to seem trivial to we in the affluent industrialized world; one article in the Ottawa Citizen (can't find it online, unfortunately) yesterday or the day before spent half a page on the price of drinkable (not clean, but clean enough not to harbour dysentery, anyway) water in a village...well, somewhere. Potable water bought from vendors costs, apparently, something like $2 per day, per person, in an area where daily wages average out to the equivalent of $5 - the implication being, of course, that one or all of "those eight men" at the G8 summit have the moral responsibility to hand over the pittance, because it is, after all, only a pittance. But that's not how markets work; introduce goods or services with little real value, and local producers will never be able to compete, leaving all involved dependent upon future handouts. Honestly, I don't see how the aggressively simplistic proponents of aid (almost entirely on the left) don't understand this. It's the same principle that leads some (largely, but not all of the same kidney) to resist the coming of Wal-Mart to their communities: they fear that Mom-and-Pop stores will be driven out of business by lower prices. Main Street can compete, though, by offering better service, or specialized goods; they can cope with being undercut on price alone. Wal-Mart, in turn, can afford to undercut, by buying inventory at lower wholesale prices. But how could those stores cope if Wal-Mart wasn't even paying that much? What if Wal-Mart was selling goods they'd received for free from well-meaning idiots halfway across the world, completely unaware of the havoc such charity would wreak? That's what it comes down to: which part of whose economy do you want to ruin today? Do you really want to pervert the natural growth of commerce and industry in desperately poor countries with perpetual handouts? Do you want to send cold, hard cash - a measly $2 for every person in that nameless, symbolic village - and cause significant inflation...assuming that any were actually to find its way into the hands of those on the ground, once corrupt local bureaucrats and UN apparatchiks take their cuts? Do you want to send grain, and bankrupt African farmers? Do you want to send clothes, and force African tailors out of work? That's what I'd like to ask the vacuous celebrities and entitlement-complex-enabling bureaucrats whining the loudest: Where in Africa do you want to, metaphorically, build a Wal-Mart? (Via Brian Tiemann.)

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