In the case of pure charity, what happens in this: Britain sends Zambia free clothing, thus obviating the need for a Zambian textile industry. This frees up Zambian labor for other tasks. And into which tasks should these unemployed be directed? Whatever goods and services the now much richer Zambian consumers buy with their extra money (previously spent on clothing). [Full Article]
Source link: http://blog.mises.org/2165/beggars-can-be-choosers/
Beggars Can Be Choosers
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The trouble with reductio ad absurdum is that it appeals to (a) economic intuition, and (b) a sense of humor — both sadly lacking qualities in your typical debate opponent over this sort of issue. It’s great for convincing people who already agree with you, but that’s about it. The problem is that the notion of trusting government to solve social and economic problems is already so absurd that there’s nowhere you can go that’s enough sillier to be disbelieved. Throughout my life, every time I thought I had a solid reductio, within 5 years it was no longer absurd. Banning smoking in public? Absurd! Suing fast-food chains for making people overweight? Ridiculous! Putting people in prison for possession of devices or information that merely could, potentially, be used to commit a crime, even if it wasn’t actually so used? Ask Martha Stewart, Dmitry Skylarov, and Tommy Chong how silly those ideas were.
By which I mean to say: wait long enough and we WILL see government-sponsored panty raids intended for the benefit of the victim country! Why wouldn’t we? Sure, it’s ludicrous, but compared to the drug war it’s almost sensible.
It would be interesting to know to what degree those British charities are subsidized by British taxpayers. At a minimum, they engage in economic activity without paying taxes like everyone else. Shipping used clothes all the way to the south of Africa? I suspect they get a little help from Uncle Tony. If so, this activity is not a free market action at all! The hand of government can be found lurking everywhere. I smell it here.
What if Britons or other foreigners decided to provide Zambians with housing, food, university education, cars, satellite TV, and spending money, all for free? Then, according to the anti-free goods writer, the Zambians would really have it bad.
Great article by Professor Murphy! I hope his students realize how fortunate they are.
Great article.
There is a similar case made on the “Love Actually” DVD about free milk. But hey, you might still like the DVD for its anti-american tone.
Better make it “anti-US-imperalism” tone.
Although the article may be based on sound economic analysis and logic, it may be missing the point.
Surely, Zambians benefit economically from free clothing or any other donation. However, the probable long term consequence of donations (or subsidies) is that recipients tend to get accustomed to them and rely on them rather than on their own creativity and entrepreneurial capabilities in order to satisfy their needs. This is the main issue with all types of “welfare plans”, which invariably end up creating poverty.
This being said, I obviously prefer voluntary donations to coercive taxation, and I am certainly not saying that charity is never justified. In this case, however, it would seem that Zambians do possess their own clothes manufacturing capabilities.
Great Article.
This is the sort of behaviour governments get involved in all the time. They try to limit tax write-offs for charitable giving along these and other lines.
Thanks for the great article!
“For example, in order to refute the doctrine that saving is bad for the economy (because it reduces expenditures, lowers business confidence, etc.), Eugen von Böhm-Bawerk pointed out that this view would also mean that one shouldn’t “save” a portion of each weekly paycheck in order to pay his monthly rent. This is clearly silly, and so, Böhm-Bawerk argued, was the claim that someone deciding to set aside 10 percent of his income for the future was thus somehow stifling economic growth.”
I wasn’t very happy with this paragraph. Analogizing personal economic decisions to national economic decisions isn’t just a reductio, it’s a classic fallacy of composition. I don’t necessarily disagree with the conclusion, but it’s still a fairly sloppy argument. I enjoyed the rest of the article though.
Lawrence, I believe I understand your concern… however if you understand the potental and I understand the potential… don’t you think some Zambian entrepreneur does too? The world is big and people aren’t all idiots.
Lawrence, I believe I understand your concern… however if you understand the potental and I understand the potential… don’t you think some Zambian entrepreneur does too? The world is big and people aren’t all idiots.
Nathan,
I am not sure I understand your point.
I am saying that people on the receiving end of charity, privileges, taxes, favorable regulations, etc. tend to opt for the (seemingly safer and easier) alternative of claiming or lobbying for the continuation of such benefits (and spend increasing amounts of time and resources on such endeavors), instead of focusing on increased productivity and innovation to prosper. This is why “transfer” programs are generally counterproductive, at least in the long run.
Basically, parasitic behavior (i.e. obtaining benefits without effort) tends to be addictive. This is not a sign of stupidity, only human nature.
This article describes the “welfare formula” for
destroying self-reliance at the nation-state level
just as welfare itself destroys self-reliance at
the personal level. In this case, a charity could
very well be a front for a government-backed operation
to destroy the a domestic textile industry. Sorry,
but sometimes marketplaces are infiltrated by national enemies
to attain a destructive goal. It is no different
than when a government agent infiltrates a political
meeting.
Xavier, A national decision is an individual decision by the nations ruler or an individual decision that is shared by more than one individual. If Bohm-Bawerk argued that a particular concept is correct because it is commonly accepted, it would be ad populum. However, he’s merely applying the oppositions logic to a different scenario. That is not an analogy. It’s a test of consistency, which is the equivalent of scientific method and the same method of argument as used in the rest of the article.
Tom, distortions such as charity may be used by the state to temporarily sabotage profitably. There’s no argument here against that. What’s being refuted here is the notion that employment equates to prosperity.
Lawrence, sometimes free is good. What I mean by this is that while there is a chance British charities will cease the clothing donations, on balance, the profit gained may outweigh the cost to their fledgling textile industry. Zambia is so poor that free, ragged clothing is more worthwhile than costly, less-ragged clothing. I am repeating the article, but this money saved can be put to other, more urgent, uses. We in America have charities that receive, sell, and donate clothing to families in need. Has this destroyed our textile industry? Perhaps Zambia could very well make their textile industry more efficient and diversified. If donation quality clothing is not paying very well, find a niche that will. Surely, clothing is not the only use for a textile factory!
I am no expert on Zambian culture or foreign relations, however I doubt Zambia had that much to do with the clothing donations other than being the recipient. Are there Zambian representatives in Britain leading the charge for handouts? Perhaps…
In your first post, you state that (and I am paraphrasing here, correct me if I read wrong!) because Zambia has a clothing industry, donations of this sort are uncalled for. Does this mean they would be called for if Zambia did not have a clothing industry? I doubt Zambia has much of a tech industry either, does this same line of reasoning now warrant computer donations? The question comes down to this: when is charity justified? My answer would be that this question has no universally true solution; it is up to the whims and preferences of the donator. This is why I believe voluntary donations are, on balance, a Good Thing.
I think we might be talking apples and oranges. I agree that welfare plans are inefficient for the same reasons you delineate, however I do not slot voluntary donations under the same title as coercive welfare plans.
Nathan,
I think there is no fundamental disagreement between us. Voluntary donations are moral while coercive welfare plans are not.
However, from the point of view of the recipient, the result is basically the same and therefore donations carry the same risk as welfare, i.e. destruction or weakening of self-reliance. It is therefore up to the donator to make a judgement call in each particular case, based on his assessment of that risk materializing. As you rightly say, there is no universal answer.
On international trade, free gifts and reductio ad absurdum, just read this brilliant pamphlet by Frederic Bastiat (“Petition of Candlestickmakers”, 1845).
(Link)
Lawrence,
What a beautiful retort from Frédéric Bastiat. It is unfortunate that Lou Dobbs and others of his ilk do not want to listen to Bastiat’s words of wisdom.
Isn’t it a shame that a country (France) with such a great classical liberal heritage happens to be one of the most interventionist, centralized social democracies in the world!
What surprises me the most, and maybe it shouldn’t, is that the verb “re-cycle” hasn’t appeared in ANY of these delightful comments—not that it would make a real difference! Wouldn’t the State and Federal prison system be the natural-legal locus of ALL re-cycling activities? Wouldn’t all future prison construction find a predetermined site–namely landfills? High quality cotton-rag stationary could become a Zambian prison labor export— if they would only bury those non-permanent press rags!
you guys might be interested in “Salaula” by Karen Hansen.
She basically outlines how what are usually taken to be donations are actually everything but. Clothes donated in Europe that make their way to Zambia are actually sold to Zambians for a profit – a profit that reaches in the 40-50 million dollar range for certain retailers. check it out
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