Monday, May 15, 2006

Make Smugness History

A blog by Edward Lucas Make Gravity History has caught my eye. His argument seems to be, broadly, that a) more and freer trade will help spread prosperity around the world, and so is a good thing (so far so good); and b) that therefore charity is a waste of time (huh?).

The choice of title 'make gravity history' suggests not a better strategy for ending poverty, but resignation to its inevitability. And this is the problem. Lucas shows all the smugness of the fat aristo telling the starving peasant that he won't give him any food 'for his own good'.

Lucas says 'fair trade' would be more accurately called fraud trade. I disagree. It would be more accurately called charity trade, and charity, remember, is a good thing. While it doesn't of course bring prosperity to the recipient, it can keep them alive long enough to enjoy prosperity when it comes.

Lucas is opposing Christian Aid's apparent position of 'trade bad, charity good', with 'trade good, charity bad'. This is worthy of the psycopathically right-wing Ayn Rand. Rand famously claimed that charity is immoral, and that only looking after number one is moral. A hero of right-wing nuts everywhere.

In fact, trade is good, and charity is good. By all means damn a charity for failing to support trade. But don't damn it for doing charity.



Rob Knight said...

Ah, but 'fair trade' isn't always all that fair. Let's accept that it is charitable, but who is it charitable to? Most of the free trade-branded coffee I come across is grown in Mexico - hardly the front line of the war on poverty.

Let's assume that the people running fair trade schemes are honourable people. They want to maximise returns to the growers, and whilst they might make a small profit, they will pass most of the higher prices on to the grower. What this does is enable them to buy coffee from relatively high-wage countries like Mexico, and not cheap countries - particularly those in Africa. This is despite the fact that Africa is quite obviously in greater need of charity than Mexico. Fair trade then effectively acts as a subsidy to Mexican coffee growers, something that actively harms the growers in Africa. If there's only one real law in economics, it's the law of unintended consequences.

Charity isn't necessarily a bad thing. Relief is very important in areas with high levels of disease, or famine and drought. But beyond that, charity can just paper over the cracks. I'm not saying that's all it does, but a focus on charity can distract us from the real problems. I take Lucas' point rather differently, to mean that we should not patronise third-world countries, or assume that their poverty is a permanent state which - out of the goodness of our hearts - we might occassionally ameliorate. Instead, it is something that can be solved and that denying this is doing more harm than good.

I gave a few more thoughts here, if you're interested.

Joe Otten said...

That's a fair point Rob, and it is true that charity rarely goes to the most needy. This doesn't make charity a bad thing, just less effective than it could be. Better charities target more needy people than worse charities.

Whether the coffee example you give is really doing harm to Africa would depend on lots of details that I don't have access to. Why aren't African growers being used? If, for example, few African growers are able to meet the terms of the scheme, there could still be a useful incentive effect at work.

And I think it is also important, politically, not to associate support for free-trade with sociopathic doctrines like Randism. There is a great desire on the left for supporting development, and anything that smells of Randism will be rightly rejected out of hand. But these people do need to be convinced, somehow, of the benefits of trade and competition.

Tristan said...

Of course, you must remember that Ayn Rand was a liberal (indeed, Liberal International have honoured her with a Freedom Award). Although true, I think her view of charity is somewhat bonkers... (along with many of her other views)

I would say that to say charity is bad is wrong, but in some cases it can do more harm than good...
Emergency relief is unfortunately very much needed, and we seem to be getting better at providing it in such a way that it also helps towards reconstruction.
Some charity does harm the prospects of progress and can lead to dependency on aid... its just very difficult to differentiate between enabling and disabling charity sometimes.

There is definitely a problem with some charities that are so ideologically bound to certain views (like Christian Aid), but to infer from that that charity is bad is absurd.

I am all for people giving money to charity if they wish. They can do what they like with their money. I choose who to give to and who not to.
I would actually prefer people to have more involvement in charities and less government aid and intervention, the biggest help to the worlds developing countries however would be to help them build non-corrupt institutions and to enable them to engage in free trade.