Poverty, Foreign Aid--and Slavery

Last Friday marked the UN decreed international day for the eradication of poverty. How did you commemorate the great event?

The Geek marked the moment by reading. He read on both the history of US foreign aid and the internal economic and social impact of the international slave trade on Africa.

He was struck by the similarities.

The international traffic in human beings conducted by Europeans and Americans as well as by Arabs had the effect of severely distorting the long standing organic African economic and social/political institutions. The distortions came as the direct and predictable introduction of foreign products ranging from horses to alcohol, guns to cheap textiles.

The ready market created in Africa assured a profitable "dumping" ground for goods that were unwanted in domestic markets due to their obsolescence, shoddiness or general undesirability. At the same time the ending of the slave trade required Africans to develop alternative means of purchase.

As a result indigenous agricultural practices were bent to the task of producing commodities desired by the outsiders. This, in turn, demanded an increase in domestic slavery to provide the labor necessary to meet the new requirements of export oriented production.

Agricultural products were joined by the output of extractive industries such as gold, diamonds, wild rubber and forest products. Colonial regimes encouraged and protected the already extant coercive labor practices instituted by the native elites.

The economic, political and social effects of these distortions last until the present day.

Even the most cursory appreciation of the overall effects of foreign aid as granted by the US and other countries in the post-World War II period leads to the conclusion that this well-intentioned(?) aid had the same impact on the recipients as slavery did upon Africa.

Foreign aid in a large measure ties the recipient country to the economy of the donor. The vast majority of grants require the recipient to purchase the output of the donor country. Loans require repayment. Repayment requires foreign exchange. Foreign exchange requires the production of something that is marketable.

Lets see. I give (or loan) you money. You have to spend all or most of the money on things I make. Then, to repay loans you have to produce something that I want to buy. At prices I want to pay.

That sounds good to me. Even if it doesn't to you.

Globalization has exacerbated the problem for recipient nations. The World Bank, the IMF and other multi-lateral "lenders" have demanded ever greater control over the economic and political decision making of recipient nations. Sometimes that control crosses the border into a flat-out dictatorial regime conducted by and for outsiders.

The creating of demand within a society is a deadly weapon. Market demands which do not arise organically but rather are created artificially from outside a society have the historically demonstrated capacity to transmogrify that society, its economy and its polity.

The binding of a society to the "global" economy for whatsoever reason, even the High Minded one of "eradicating poverty," is inherently dangerous.

Yes, the binding may work. It may improve the well-being of people beyond the elite of a particular nation. It may allow for more people to buy more seeming essentials, the 21st century equivalents of the cheap textiles, shoddy ironmongery and weapons of the African experience in the 16th to 19th centuries.

Whether that sort of increased purchasing power is a good thing for people is an open and arguable question. But, it does constitute the least-worst outcome of both globalization and foreign aid.

The historical record as well as contemporary developments demonstrate that the roster of outcomes can get far worse. The bondage of a society to either the interests of a generous donor country or a multi-lateral institution such as the World Bank and IMF can result in the political, cultural and environmental impoverishment of the majority of the society's members no matter how much the elite may benefit. This, in turn, has the strong, (the Geek is tempted to write "inevitable") potential of leading to armed political dissent.

Then there is the question of just what constitutes "poverty?"

The Geek is congniscent of the purchasing power parity metric which is commonly employed to define poverty. He is also well aware of standard pap of equating a daily expenditure level of so many US dollars per day and the accompanying allegation that too few bucks per day spent by the average inhabitant of Lower Slobovia or Eastern Fartistan constitutes "poverty."

The Geek has personally witnessed severe deprivation by more valid standards than those thrown about by advocates of the Millenium Development Goals beloved by the UN and its legion of High Minded supporters. He has seen misery far more basic than any which can be expressed by purchasing power parity artifacts.

He has seen some of the worst of the wretchedness and life threatening deprivation in countries spread from Africa to Latin America which have been the "beneficiaries" of foreign aid largess and globalization oriented investment programs.

The Geek has seen the effects of misplaced faith in the elevating potential of foreign aid and foreign investment. He has seen them in the disruption of communities, value and ways of living that have successfully withstood generations, centuries of the normal stresses, common uncertainties and accustomed viscisitudes of life.

The more one acquaints himself with the effects of the slave trade and its aftermath on Africa the more one sees the similarities--the identies--with the impact of foreign aid and globalization.

What this suggests is simple.

It is wrong headed to the maximum for the US or any wealthy nation to be stampeded into signing on to ambitious High Minded efforts to eradicate poverty thoughout the world. The road to hell is not so much paved by good intentions as it is mandated by the Law of Unintended Consequences.

Get a firm grip on history. What happened centuries ago in Africa; what has been happening in much of the world including Africa over the past half century shows what will happen--on steroids--in the future under the impetus of the Global Poverty Act currently pending before the US Senate and similar proposals of expanded financial redistribution.