Our recent argument in response to Bell Curve's inspiring post earlier has inspired me to start a new thread.
Leftists, liberals, and progressives are divided about what to do about world poverty and how to react to the steady increase in world trade since the mid 1980s. When we add environmental concerns to the mix we have quite the Gordian knot of problems. What causes poverty in developing countries? What prevents people in developing countries from improving their own situations? What impact will the increasing trade and prosperity in the world have on the environment?
We obviously won't be able to solve these problems here. But it might be interesting to discuss some of this. I'd like to start by suggesting some good readings.
One of the most interesting books I've read about economic development in the developing world is The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else by Hernando De Soto, a Swiss trained Peruvian Economist. The short version of his answer to this question is "rule of law" - we have it, they don't. Essentially he argues that the poor in the developing world have an enormous amount of resources, far more resources than all the aid from all the rich countries and NGOs combined from all time. But they can't use those resources, like we do, to generate returns on investments (that is turn their resources into capital) because their local legal systems do not sufficiently protect property rights. For example, a peasant who "owns" his own farm in a place like Guatemala or Zambia etc cannot easily prove that he owns that farm. This prevents him from using it as collateral and so he can't borrow against the farm to improve it by say, enlarging his house, buying more livestock or equipment etc.
Another interesting book about trade and globalization is In Defense of Globalization by Jagdish Baghwati an Indian economist trained at Cambridge and MIT. Professor Baghwati discusses globalization and trade from the perspective of someone who grew up in Mumbai. Like De Soto, I think this gives him some credibility that most commentators on this issue don't have. Most of the debate about globalization goes on between left wing and right wing intellectuals who have lived most of their lives in the richest parts of the world. Baghwati has seen how the other 4/5 of the world lives.
Finally, I'd like to recommend the Copenhagen Consensus website to you all. This center gathers together interdisciplinary groups of researchers to determine global problems that can should be solved first. Their criteria isn't moral or ethical but rather, how much benefit would be generated for how much effort/cost. The main idea is that by solving problems that generate a lot of benefit for the least cost first, we put ourselves in a better position to solve the problems on down the list. It isn't an argument against solving some problems. Rather it is a question of walking before we run. In particular, I'd like to recommend the first Copenhagen consensus list from 2004. The top problem is the HIV/AIDS crisis (which is particularly nasty in Africa). They argue that HIV/AIDS is sapping Africa's already strained resources with devastating effects.
Thursday, June 26, 2008
Posted by Raised By Republicans at 3:51 PM