The White Man’s Burden: Review

In the sixty plus years since the end of WWII, Western governments and aid agencies have dolled out more than $2 trillion dollars in economic assistance to the world’s poorer nations as a means of economic development. The results of all this assistance, to put it mildly, have been far from stunning. Numerous studies have found no positive effect of foreign aid on economic growth, and there is even some evidence that the impact may be negative.

And while some countries have seen spectacular growth in recent years (to the point where the standard of living in these formerly “Third World” countries now exceeds that of many places in the West), this growth has tended to be in countries that have received little in aid.

Dysonism or: How I Learned to Stop Worrying and Love Coal

Last week’s New York Times Magazine contained a very interesting profile of Freeman Dyson. Dyson is a famed physicist, anti-war and anti-nuclear activist, and Obama supporter. He is also a global warming skeptic.

Actually, ‘global warming skeptic’ is a bit of a misnomer. From from I could glean from the article, Dyson agrees that the Earth is getting warmer and that human activity is probably responsible. His disagreements with the “consensus” touted by Al Gore et al. focus on what should be done about it. According to Dyson, the potential negative consequences of global warming have been overblown, and are partly offset by some positive consequences that a warmer earth might bring. In addition, what negative consequences global warming does bring can be ameliorated much lower cost than what would be required to stop climate change simply by controlling emissions (Dyson’s own preferred solution is to use massive carbon sequestration, possibly with plants genetically engineered to eat up large amounts of carbon).

Here is a taste:

Confessions of an Economic Hitman: Review

Part memoir, part polemic, Confessions of an Economic Hitman tells the story of John Perkins, a former economic forecaster for the engineering firm of Chas T. Main, Inc. As a forecaster, Perkins’ job was to provide estimates of the effect various infrastructure projects (mainly electrification) would have on economic growth in developing countries. These estimates were then used to justify loans to developing countries from international aid agencies, which would then hire Main to complete the project.

Perkins makes two claims about his work for Main. The first, that he inflated his estimates so Main could get more and bigger contracts, sounds fairly plausible. It’s true, for example, that the actual growth resulting from foreign aid has often fallen far short of projections. I’m inclined to think that this was more often the result of wild eyed optimism than crass cynicism, but I have no doubt that this sort of corruption did occur, and my only objection to Perkins’ remarks on this score would be to the idea that corruption in transfers of money from Western governments and agencies to developing world governments somehow represents an indictment of the free market.

In addition to profit-seeking, however, Perkins claims that he was in reality an agent of the NSA, and that his true mission in getting developing world governments to agree to these loans was to so saddle them with debt so that they could be forced to abide by Western economic and foreign policy interests.

Who Protects the Worker?

In the comments to my post last week on the minimum wage, reader Matt Talbot posed to me the following question:

Blackadder, I’m expecting your answer to be characteristically parsed and lawyerly, but I’ll ask anyway: Do you think there is any imbalance in power between Walmart (say) and a door greeter or stocker that works there? If so, in your libertarian utopia who or what would protect the workers from abuse by management?

It’s a good question.

After Rights, Then What?

Radical Catholic Mom’s response to my post on sweatshops put me in mind of an old quote by Edmund Burke:

What is the use of discussing a man’s abstract right to food or to medicine? The question is upon the method of procuring and administering them. In that deliberation I shall always advise to call in the aid of the farmer and the physician, rather than the professor of metaphysics.

It is all well and good to tell people they have a right to eat more than one meal a day, or to live in better housing, or to receive higher wages, an education, clean water, and so forth. Simply declaring that people have a right to such things, however, accomplishes very little. You can’t eat a right. You can’t sleep in it, drink it, wear it, or use it to protect you from the elements. Having the right to eat more than one meal a day is not the same as being able to eat more than one meal a day, and it is a fallacy to assume that declaring that people have a right to something will bring them into possession of that thing. Calling something a human right, a natural right, a fundamental or basic right will not change this, nor will writing the word ‘right’ using all caps.

Schindler’s Sweatshops

Oskar Schindler was a German businessman and Nazi party member. During World War II, Schindler opened a factory in Poland making enamel kitchenware using Jewish slave labor. Life for the Jewish workers in Schindler’s factory was far superior to life in the Nazi concentration and extermination camps to which they would otherwise have been subjected. Still, working conditions in Schindler’s factory were such that, were they to occur in a factory in the developing world today, they would no doubt be roundly condemned. Nevertheless, Schindler is today known as a hero precisely because of the kind comparatively kind treatment he bestowed on the Jewish workers in his factories during WWII.

No doubt much of the heroism associated with Schindler’s actions has to do with his motivations. While he started his factory merely with an eye towards making money, as the war progressed he became motivated by concern for his workers in their own right, to the extent that by the end of the war he was willing to lose all of the fortune he had earlier amassed protecting his workers form the Nazis. Had he acted purely out of self-interest (first out of a desire for money, then out of a desire to save his own skin by ingratiating himself with his soon to be liberated Jewish employees) then he would likely be regarded not with awe but with disdain. But if the only difference between Schindler the hero and Schindler the villain is his motivation (not any of his actions, or the results thereof), then we must admit that it cannot be per se immoral for employers to employ workers in horrible conditions and with little or no pay.

Krugman on Equality

Since his Nobel prize was announced last week, I have been (re)reading some of Paul Krugman’s old columns for Slate magazine. I find the columns to be thoroughly engrossing, which is to say not that I think everything Krugman says in them is right, but that even where he is wrong he is wrong in an interesting way or for interesting reasons.

Case in point: in a column entitled The CPI and the Rat Race, Krugman argues that it is inequality, rather than poverty, that is the more important social problem. Krugman begins the column by conceding (as he must) that, materially speaking, life has gotten a lot better for Americans over recent decades:

In 1950 some 35 percent of dwellings lacked full indoor plumbing. Many families still did not have telephones or cars. And of course very few people had televisions. A modern American family at the 12th percentile (that is, right at the poverty line) surely has a flushing toilet, a working shower, and a telephone with direct-dial long-distance service; probably has a color television; and may well even have a car. Take into account improvements in the quality of many other products, and it does not seem at all absurd to say that the material standard of living of that poverty-level family in 1996 is as good as or better than that of the median family in 1950.

Two Ways to Help Poor and Low Wage Workers

Suppose that an employer pays some or all of his workers the minimum wage. If the minimum wage is raised, he might respond by raising the wages of his workers to this new minimum. But this is hardly his only option. Instead of raising wages, he might decide to move the jobs in question to a place where the minimum wage law in question does not apply. He might decide to automate the jobs, so that they are done by machines instead of workers. He might decide to lay off workers (or to hire fewer new workers than he otherwise would have done), and indeed he may be forced to do this if the higher labor costs imposed by the new minimum wage law render his business unprofitable.

To deny that an increased minimum wage law decreases employment is to claim that no employer would respond to an increase in the minimum wage in any of these ways, or that any employer who did respond in one of these ways would be canceled out by other employers who responded to the minimum wage hike by hiring more workers than they otherwise would have. This, needless to say, does not strike me as being very plausible.

This negative employment effect is one argument against minimum wage laws, but it isn’t the only one. Another common argument involves demographics. Minimum wage laws aim to help poor workers, yet they apply to low wage workers, and these are not always the same people. Around half of minimum wage workers, for example, are teenagers, many of whom, presumably, do not rely on the wages from these jobs for their daily bread. This is a particularly vexing problem for those who want to use minimum wage laws as a proxy for a just wage, defined as a wage sufficient to support oneself and one’s family, since a just wage will be higher for those with families than for those without.

The Minimum Wage is Always Zero

Yesterday the federal minimum wage was raised from $5.85 an hour to $6.55 an hour. Perhaps you didn’t notice. Minimum wage laws are a strange sort of thing. They’re quite popular, yet the arguments used to support them are often of the sort that, in other contexts, hardly anyone would find persuasive.

Suppose I were to argue as follows: Homeless is an injustice and a tragedy, and no one should have to beg on the streets for food or money, or to sleep on the streets. Therefore, we should make begging and vagrancy illegal.

Presumably few people would find such an argument convincing. They would recognize that, bad as it is to have to beg for money in order to be able to eat, simply taking away your ability to beg while doing nothing about the circumstances that led you to beg in the first place isn’t going to make you any better off.

The Disaster of the Past

I’ve started reading Matthew Connelly’s book Fatal Misconception, which is a history of the population control and eugenic movements. So far the book is quite good, and I hope, once I’ve finished it, to write up a more formal review. For the moment, though, I’d thought I would quote from the book’s opening, which I found quite striking:

Imagine a world with an average life expectancy of less than thirty years. Many babies do not live to see their first birthday. Subject to chronic malnutrition, children are vulnerable to disease, grow slowly, and find it hard to learn. Those who survive to adulthood seem stunted, with an average body mass a third smaller than our own. The great majority live off the land. The few who inhabit cities – dwelling with their own waste and drinking water alive with microbes – are even more likely to die early deaths. Altogether, there are not even a billion people on earth, less than a sixth as many as there are today.

This is not some post-apocalyptic future. It is the world we left behind two hundred years ago.

The amazing thing is that historically speaking conditions 200 years ago weren’t particularly bad. They were, if anything, better than they had been for most of human history. What is atypical is not the poor condition of people 200 years ago, or of many people today. Rather, it is the high standard of living the West currently enjoys that is out of the ordinary.