I was speaking with a Nigerian student about Ms. Moyo's ideas as reviewed below. The problem keeps arising "the aid does not get to the people who need it." I say the people do not need aid, they need freedom. He being Moslem checked his beliefs against mine, and agreed there is no bar to freedom in Islam, since it is a gift from God. (Again, freedom to contract, freedom from interference in contracts, at its most basic level.)
I made the argument that it is entirely rational to live in poverty since anything these people get will be taken away from them. Why work hard when you will lose it all? He hesitated and then laid the blame on the exploiters.
He laid the blame at corrupt officials and foreign intervention, so I asked how and when will officials stop being corrupt, and foreign governments stop interfering? Of course never.
The problem is huge territories of competing tribes that were arbitrarily put into countries wherein one group is played off against the other certainly serves imperialism.
We see from examples that freedom peace and prosperity seems to be best in small, strong currency, laissez faire countries, but rather accidently in creation. I'd argue that a push for small national units by means of nonviolent resistance is the most likely way to set up a happy accident just waiting to happen. Moslems and Hindus worked together in the nonviolent movement to rid India of British colonialism. The evidence of this is rather overwhelming.
The student after a while then related the story of Burkina Faso, a country who elected a leader who made reforms allowing people to self-support themselves (I think he was referring to the 1984 Sankara leadership. He said this threatened French interests and the efforts were overthrown. Regardless if accurate, the idea that anything you earn will be taken is destructive.
Freedom is God given, not government given. Getting the "right people in office" will never happen. The only place we need the right people is where people actually work, and we've got that already. Burkina Faso regularly has violent overthrows and even worse results. Nonviolent movements intrinsically provides the training necessary to be free. Free markets are based on nonviolence, and you cannot have a free market without a nonviolent foundation.
Saturday, March 28, 2009
Live Trade
Thursday, March 26, 2009
Dead Aid
There is one of those celebrity-focused entertainment shows on TV called Charlie Rose. I was watching last night when a beautiful young African woman was discussing her book with the host.
Dambisa Moyo: Dead Aid: Why aid is not working and how there is another way for Africa, 208 pages, Allen Lane. www.deadaid.org
I am not here reviewing her book because I have not read it. I am reviewing the ideas from the book I heard on the show.
In essence she says we must end aid to Africa, and let markets do their work. She herself says she “plagiarizes” her ideas from Peter Bauer, indeed she dedicates the book to him.
Along with ending aid, Africa’s hope she avers are the free markets enjoyed by so many other countries wherein the population rose from poverty, China being the most recent and remarkable. 
End aid and free markets, so far so good. But this puts her up against entertainers such as Bono, Peter Singer - the clown prince of Malthusianism holding a chair at Princeton, and emo-entrepreneur Jeffrey Sachs (he has the look down to the hairstyle. Sachs and emo both owe their beginnings in Washington DC in the late 1980’s, but most followers grew out of it).. All have been guests on Charlie Rose’s variety show.
Ms. Moyo dismisses the lot of them with the question: “Why should Bono be setting policy for Africa?” A most wonderful question. Indeed, Rose proposed to have her and those others on the show to work through precisely that question.
I’ll bet the show never happens. Charlie Rose has had all of those people on over the years when there have been others saying what Moyo says now. A google search shows Moyo being the first to present such ideas on the Charlie Rose show, yesterday. These ideas have been around for years, but entertainment shows want a comely Dambisa Moyo to present the ideas, not some Njoroge Wachai. And even more so, Njoroge Wachai has ideas that will never be aired.
Dambisa Moyo is a Zambian who worked at Goldman Sachs for eight years. Previously she consulted at the World Bank, and has a doctorate in economics from Oxford University and holds an MA from Harvard’s School of Government.
She questions why policies for the rest of the world are not applied to Africa? One of her Harvard professors was Jeffrey Sachs who ever proposes raising aid to Africa.
Moyo wondered to Rose how come at Harvard Sachs was always saying that Russia, Poland and Bolivia had to adapt to the free market, but when it comes to Africa, he advocates aid? Why is there a policy difference when it comes to Africa? She repeats questions from other interviews: Is he saying that Africa is fundamentally different from the rest of the world? Is he saying that Africa will never get it together? Is he saying there is something terribly wrong with this continent?
Well, I’d say not for all of Africa, because such policy prescriptions were never suggested to apartheid South Africa or white dominated Rhodesia. There are a different set of policies for black Africa. Aid is for Africans, not Afrikaaner. Could it just be racism? Probably. Most of the reviewers of her book say things like her prescriptions are optimistic. No problem for Russia, but optimistic when it comes to black Africans.
Now here is my problem with Moyo’s ideas: of course Bono ought not be setting policy for Africa, but neither should Peter Bauer, to whom her book is dedicated, also a white man.
Against aid Moyo is clear, but when Moyo says free markets, she means welfare-queen Goldman Sachs versions of the free market. Certainly this is a step up from the kleptocracy imposed and embraced in Africa, but Africans can do better than that. If they are going to make wrenching changes, then go to something good.
Do not adapt the Goldman Sachs/WorldBank method and deny us the good of African genius that would emerge in a true free market. Let the legal structure be formed in Africa by Africans and let the genius of Africa offer the rest of the world what Africa can offer. Moyo to my mind is not optimistic enough. Grounded in natural law, the free market would unleash African people to contribute what the world needs while relieving themselves of the burden of poverty.
Moyo is all for debt-relief. Debts assigned fraudulently are void. Relief leaves the imperialists in power. Repudiation is the solution to African debt crisis. We already know the imperialist game of getting third world kleptocrats to agree to electrification projects a country can never afford, then foreclosing on the country and tying up its wealth for exploitation and extraction.(Exactly the same process is use in USA by Americans on Americans with mortgages and student loans.) When African courts restore the rule of law and decree African debt is really the obligation of the few thousand Africans, educated at elite western schools, who betrayed their countries, the imperialism will stop. Let the IMF collect the billions from the likes of Ms Moyo and her cohort who got Africa into trouble in the first place.
I’d like to see Ms. Moyo, as a Zambian, tell the WorldBank she is personally responsible for Zambia’s debt, and they should collect the billions from her. But as she does not have it she will not pay, so they may write it off. If they wish to press the case in court, her defense should be there was fraud on both parties part, therefore the obligation is null and void. Imperialism could not stand it.
As Rose was winding up the interview he mentioned Peter Singer as one to have on a roundtable if Ms. Moyo were to return to Rose’s variety show. Peter Singer? The neo-Malthusian? (Now I know people will object, but the heart of Malthus is utilitarianism, and Singer is self-described as such.) Singer’s policies ostensibly would help Africa, but realistically would lead to much more misery.
Let's look at parts of an essay regarding foreign aid by Singer, and his salient question:
***In the end, what is the ethical distinction between a Brazilian who sells a homeless child to organ peddlers and an American who already has a TV and upgrades to a better one — knowing that the money could be donated to an organization that would use it to save the lives of kids in need?***
The answer of course is none. So Singer twists the knife:
***You shouldn't take that cruise, redecorate the house or get that pricey new suit. After all, a $1,000 suit could save five children's lives.***
Now Singer makes his call to action:
*** We can give to organizations like Unicef or Oxfam America. How much would we have to give one of these organizations to have a high probability of saving the life of a child threatened by easily preventable diseases?***
Well, here is the problem: Unicef, Oxfam, Save the Children have been at it for decades and are yet to save a child or inoculate against a preventable disease, in any meaningful way. Giving money does not good whatsoever.
Diseases outbreak from war, if smallpox does not get you because you are inoculated, then dysentery will. It is not a lack of inoculation, it is the presence of war. Countless inoculated children a dying because of imperialism. Countless of well fed recipients of aid are dying in refugee camps. Michael Maren outlined in his book the Road to Hell what many people intuit, donating to charity in Africa does no good. Singer addresses this point obliquely:
***Is it the practical uncertainties about whether aid will really reach the people who need it? Nobody who knows the world of overseas aid can doubt that such uncertainties exist. But Unger's figure of $200 to save a child's life was reached after he had made conservative assumptions about the proportion of the money donated that will actually reach its target.***
OK, send $200, and $20 gets to the starving child who gets properly fed, $180 to the Harvard educated Africans who steal the rest, or the warlords. Who cares about this $180 “tax” when the starving child is saved? The problem remains, the child dies anyway in a conflict. The wars are over control of the $180 to be stolen. It is the aid itself that is motivating the killing.
Moyo is on the right track saying "we Africans can compete with the rest of the world” and she is right to criticize African leaders who embrace the aid as much as the Western leaders who offer it. She says Africans can feed and inoculate their own kids without aid, and with Goldman Sachs style capitalism. This is no doubt true. But again, she sells Africans short when she does not go the next step: skip full integration into the Goldman Sachs capitalism, and go straight into free markets. Her model should be Hong Kong, not Iceland.
But let’s finish off Singer, not a serious thinker. Here is his payoff, making white liberals squirm at not sending more aid to Africa:
*** if we value the life of a child more than going to fancy restaurants, the next time we dine out we will know that we could have done something better with our money. If that makes living a morally decent life extremely arduous, well, then that is the way things are. If we don't do it, then we should at least know that we are failing to live a morally decent life — not because it is good to wallow in guilt but because knowing where we should be going is the first step toward heading in that direction.***
Singer is notorious for advocating infanticide. It is demonstrated aid leads to infant mortality in Africa. So his concern for dying children is bogus. Making white liberals squirm may lead to more aid to Africa. Singer specifically recommends a family of four with $50,000 income ought to send $20,000 to Africa.
That indeed would end the lives of many Africans.
Africans fed and medicated themselves before the white man showed up. Certainly a portion of the wealth I have is derived from empire, and specifically some at the expense of Africans. But African starvation and war is not from an African inability to make themselves wealthy, but from the all too human problem of elite's betraying their presumed inferiors, and the human frailty of following "leaders."
Me sending money back to Africa will lead to more starvation in Africa. Africans tiring of being betrayed by the elite, and insisting on self-rule (I recommend Gandhian nonviolence movements) will at once cut off any benefit I personally get from empire, and at the same time make all Africans more wealthy as they introduce new additions to the good, the true and the beautiful the world has to offer.
I am motivated here by greed: as Africans get more wealthy, I will get far more wealthy trading with Africans than empire ever delivered to me. I dislike empire because it delivers far too little to me.
Moyo recommends bond markets and the type of financial instruments that are the acid now melting down our economy. Njoroge Wachai says trade not aid. Wacha has the better argument. Moyo still wants to take advice from white men who have no interest in free markets. Africans are capable of so much more.
So the prescription is first do no harm. End aid. Second replace kleptocracy with a better system. Moyo’s recommendation for Goldman Sachs/ WorldBank capitalism will do no more good for Africa than it has done for us in the west. Repudiate the debt, do not beg for debt relief when you owe nothing to begin with. (In this way, also, I’ll personally end up paying for what empire delivered to me.)
Free markets provide innovation and deliver commodified goods and services more. better, cheaper, and faster, and only require whatever rule of law be grounded in natural law. Natural law of course belongs to mankind, so Africa needs no one’s permission or advice to adopt it, and being natural whatever legal system develops in the various parts of Africa will be as natural as curly hair on black Africans. And Africans will produce what the world is missing, what we are currently denied and do not yet see, those benefits suppressed by capitalism and aid. Those things free market advocate Bastiat said remain unseen until markets become free.
The evil that overwhelmed China and Russia last century was driven out and moved to the United States and Western Europe. The slogans of “workers in a workers state” and “perpetual struggle against capitalism” are replaced by “end global warming” and “global war on terror” (the latter being introduced by the neocons, Trotsky’s own children.) Africa should move up not follow us down.
Do not prescribe a system that failed in the West for Africa. Moyo may have gained many benefits in the Goldman Sachs capitalism, but she is arguing from the narrow basis of comparison. Give Africa back to the Africans. www.deadaid.org
Tuesday, March 24, 2009
First Time Home Buyers Sales Up in Feb
Prices have fallen enough to where a heretofore group unable to buy a home now can. This is an excellent example of the good things that happen when the market is relatively free. One aspect of the bailout is to help keep prices high. People who scammed their way into homes will stay in them as we pay their mortgages, hardworking families are shut out. There is no emergency.
Money Is A Medium of Exchange
Once we traded firestarters for a wheels. Eventually we began using gold coins as a medium of exchange. Then warehouse receipts (for stored gold) we used as currency. Now we have a Federal Reserve Bank. That is a quick history of money. Never forget money is a medium of exchange, and you will be able to figure out what is going on economically.
Albert Jay Nock said "...everything which is paid for must be paid for out of production, for there is no other source of payment."
Printing money in excess of what is in the warehouse makes a claim on all savings, normally in the form of inflation. All of these bailouts are guaranteed by we the taxpayers. They are an inescapable claim on your savings and future production of goods and services.
Under the rule of law the people who got themselves in trouble would fail.
Tiffany's Profits Down 76%
Good news: Tiffany is clearing out their boom time baubles and so their profits are naturally way down. In USA their sales are down 20%. A 20% drop in sales with a 76% drop in profits means deep price cutting. Tiffanys is making the right moves.
Their overseas operations sales dropped only a few percents, suggesting the economies overseas are much stronger right now than in the USA.
The travel industry is helping retailers out with their deep discounts. Luxury Hotels are giving rooms away to foreigners to get some revenue. My daughter spent last weekend in New York's Waldorf Astoria stowed away with her Italian family who were guests. With little travel costs and Tiffany's at deep discounts, foreignors shop here. Retailers need to have the ability to ship goods back home for travellers to increase sales.
Tiffany's is still profitable, because they can handle their debt load with lower sales and narrower margins. The missing elements, the desperate question is, what is new?
Anyone with a passion for jewelry can be part of the solution to our economic troubles right now by starting a business that sells to Tiffany's and other such stores. If a person gifted with such a passion is working in another field or worse yet, unemployed, then they are part of the problem.
The Plan
The Obama plan to save the system is unveiled, and as several prominent economists have pointed out, it will not have the desired results. Well, that depends on what you want. The plan will refund losses to those who caused the problems at the top levels, but do nothing for the average American. It passes on the costs to the children of the average American. This much is clear, and perhaps, sometimes, results reveal intentions.
For all of the talk of saving "the" (their) system, at the same time they are abandoning that very system. (Why not, it doesn't work...) The regulators and their masters on Wall Street are busy rewriting the rules for a new system. The mattress-backed politicians will rubber stamp any system they devise, not that they would read any of the legislation anyway. Our system is changing and we have no say.
Some of the sharpest critics of the Obama plan are left-wing supporters of Obama. A subtext in their criticisms is that the deal is so raw, the voter backlash may be overwhelming, perhaps even violence in the streets. Perhaps, but the chances of anything getting out of hand are about zero, given the militarization of local police, and the violation of the Posse Comitatus law under Bush and now Pres. Obama.