Does the Third World Need More Laptops?
Jamaica is a nation where my students believed the solution to the country's ills was to "ask for more money from President Bush." I knew better. US aid rarely makes it to a small school in the countryside. There were too many dollar-hungry bureaucrats driving late-model Fords circling the government agencies and NGOs of the capital, Kingston, to allow much money to escape their grasps. And, it would not have mattered even if some money filtered through; the money always went for the PC when it was bicycle repairs that were needed. Mises long ago explained this inability for central planners to lead an economy in any direction other than down Chaos Avenue. FULL ARTICLE
Comments (18)
Great article! For more on why poor countries stay poor, I highly recommend Lawrence Harrison's "The Central Liberal Truth." I just finished it and I think most Austrians will like it. It has a full chapter on Jamaica, too.
Published: January 25, 2007 8:49 AM
The real answer is:
If we really want to help a poor country then simply drop all tariffs and trade restrictions on the products that the country exports. All the aid in the world will not help. Here are some good examples:
1. Help Pakistan, our "partner" in the War on Terror. Remove tariffs and trade restrictions on pajamas, sweaters, sporting equipment etc.
2. Help Cuba and get rid of Castro. Remove tariffs on tobacco, rum, sugar, and the like.
3. Help Egypt.....
4. Help Jamaica?
The fact is that this nation really does not want to help itself and these other poorer nations. Instead it wants to run over the rights of its citizens and keep the people of these countries impoverished.
Published: January 25, 2007 9:08 AM
You hit the nail on the head! I have a professor who used to be a government auditor in a former communist country (Yugoslavia)and a very good friend who is from Cambodia. They have both told me about how the US has sent millions of dollars in foerign aid to their former homeland, but most of it ends up in the hands of corrupt bureaucrats--all at the expense of the American taxpayer. This is just one more example, and it shows that bureaucracy and etatism have no cultural or ethnic divide; they are a result of centralized government power.
Published: January 25, 2007 9:16 AM
I don't recall if it was Peter Bauer who said it, but:
Foreign aid is taking money from poor people in rich countries and giving it to rich people in poor countries.
Another way of saying it would be:
Corrupt bureaucrats buying corrupt bureaucrats with our money.
Published: January 25, 2007 9:29 AM
Is this a good reason why charity should be personal and local?
Published: January 25, 2007 9:50 AM
Free Markets is the answer...
but, wach out,
third world countries,
is not one country.
Published: January 25, 2007 10:33 AM
Excellent article. The people of developing nations need laptops like they need holes in their heads. Not that the One Laptop Per Child project is bad in principle, far from it. But the dogs are many in any advanced technology, and what with its new design and user interface, the OLPC XO is higher risk than most. And I cringe to think that the governments in question (or their affiliated sugar daddies) will be shelling out up to $30 BILLION A YEAR on these things. Doomed to fail, indeed.
Published: January 25, 2007 10:49 AM
The cell phone is replacing the personal computer in the USofA and in other nations.
Published: January 25, 2007 11:38 AM
The dog in the case of a laptop used by children may well be software. Every month or two my two girls complain that their computer is running too slow. When I take a look, I see that all their fun stuff: social connections, music swapping, etc. has resulted in 30 or so new programs that startup w/o their knowledge.
Just the other day, I found 30 copies of internet explorer running, and so their computer sat there unable to do much of anything useful. After 2 hours of cleaning out all these extra programs, none of which the virus checks or spybots found, their computer became usable again.
Hmmm, maybe someone will have the bright idea to disable all internet use. Come to think of it, do they even have internet in the 3rd world?
Published: January 25, 2007 11:56 AM
The idea that you can help the poor in the third world by giving them used laptops is like the idea that you can help a bum in New York City by giving him a rusty old BMW. Getting a BMW is nowhere near the highest priority in his scale of values.
If instead of getting them laptops we gave them cash equivalents, how many do you think would use the cash to buy laptops?
Published: January 25, 2007 12:12 PM
The early comments (e.g. bill and nancy) hit the nail on the head. USAID used to brag that 80% of its funds made it back to the US via products and services which had to be provided by US companies.
In the case of Jamaica, there is an excellent documentary, Love and Debt which pointed out how the Jamaican economy, particularly the ag sector was destroyed by forcing the country to open its markets to subsidized US products-- Mexico has a similar story to tell.
As one person pointed out, the cell phone is becoming, defacto, the computer/phone/ipod etc and these now can even fall into the hands of the poor by a variety of creative schemes
It would be interesting to see if the bike did rust for failure of a "dog".
Published: January 25, 2007 6:21 PM
Jim, excellent post.
The "developing" world is stagnant and not developing because the elite (politicians and bureacrats) run their respective countries for their own benefit - just as in the US, but to a much more pronouced extreme.
If we want to help the poor in these nations, we have to get around the stranglehold of the rich - by showing the rich how they can be much more wealthy by through trade rather than through stealing and oppression.
A good start would be to open our own markets, and to end the general boycotts of countries like Cuba and North Korea, which only serve to lock the despots in power by preventing others from acquiring wealth.
Another approach might be to insist on conducting other aid programs through locally-established but foreign-managed trading firms.
Published: January 25, 2007 9:36 PM
I don't think free trade will help these people economically, at least not right away
free trade only helps when property rights and contract obligations are respected in each country.
De Soto has a nice book explaining why 3rd world countries do so bad, even if they have the low tax base that encourages growth. The main point is that property rights and titles are not respected. So a formal legal system that enforces property rights would be a nice start. Until then free trade will be somewhat unstable.
Nonetheless, free trade makes it easier to resist local tyrants and undermine statist ideas, so that in itself is more than enough reason for free international trade.
let free trade rise, and see tyranny fall
Published: January 26, 2007 12:25 AM
It's called "Life and Debt", not Love and Debt. It was on PBS a while back. Intrepid users can find it (and other documentaries) floating around the ether of the internet.
Published: January 26, 2007 7:39 AM
"Bill" Gates has been banging the drum for all this again. People must not rely on charity for the Africans (and so on) to get lap tops and other stuff - they must act "as voters" to make sure governments provide the aid.
I have never owned a laptop, and this bulky space eating computer was bought with money I earned as a security guard.
Perhaps Mr Gates will buy me a lap top or get the "government" (i.e. the taxpayers) to do it.
When I was young I used to wonder how people could hate the rich. After all a rich person either inherited their money (in which case one should welcome their good fortune) or worked for it - in which case one should celebrate their business skill.
But hate them? Surely such an absurd response must be based on some fallacy like the "labour theory of value" or was just an example of envy.
However, I have come to dread the word "billionaire", as whenever one of these people (Soros, Buffet, Gates - and so on) is interviewed on radio or television or quoted in the press (on any subject) they talk utter nonsense. And the talk this nonsense in a know-it-all way which screams "listen to me, I have got lots of money so I must know what I am talking about" (when they clearly know nothing at all).
For example, when such people cite a writer they will tend to totally misunderstand what the person wrote, when they cite facts these "facts" will often be wrong, and when they try and reason their "arguments" will be a tissue of fallacies.
Perhaps billionaires devote so much of their minds to making money that they just do not have enough left to know anything about anything else -or even to know that they do not understand anything else.
Or perhaps there are lots of interesting billionaires out there, but the media just choose to interview the morons.
Published: January 27, 2007 7:02 AM
Then the greater question is: why are there so many poor people when others have succeeded so well? People complaining about discrimination and other assortments of barriers have to ask how can Capitalist-minded people become so rich when others just go around in circles? Oprah Winfrey had a double-whammy going against her: she's a woman and an African-American. How could she succeed with sexism and racism going against her? But the fact that poor people have become rich against the odds means why haven't the other poor followed too? Or was the change was when future rich folk proclaimed they were 'broke' not 'poor'?
Published: January 27, 2007 7:16 AM
I submit that the real reason why the self-made rich, who rise out of poverty, are so scarce is: the "self-made [wo]man" comes from a subculture whose high-status earmarks are inconsistent with accumulating wealth. This implies that the "cultural barrier to entry" for the would-be rich person, in the poor part of town, is being stigmatized as some kind of "loser" by the neighbours.
We do live in a high-time-preference age, which, as Prof. Hoppe deduced, results from a democracy encouraging such behavior. As a result, many "winners'" customs are high-time-preference behaviors. Consequently, to act in a low-time-preference manner invites the stigma of "loser." The person who ascends from poor to rich has to plow through that cultural barrier to exit from Poverty Row.
If you ever wonder why there's an affiliation, at least in America, between the "bourgeoise" and Nietzsche, it's because Nietzsche encourages the would-be self-made person to see the winners in his or her locale as the "herd."
Others use Christianity to get through their trials: "Forgive them, Father, for they know not what they do." Whatever the psychological means used, it's a hard struggle.
The only exceptions I can think of to this rule, are successes in the arts, entertainment and athletics. They get through by offering a lot of freebies at first, and by blaming "the agent" [or "business" itself!] when it's time to charge for their services.
Published: January 27, 2007 11:42 AM
I read this post. In my oppinion it's nothing in comparison with a world revolution!
Published: January 30, 2007 5:03 PM