Comments (7)

• Jim

  after reading this, i found myself observing: i own plenty of goods made in Asia, but few if any made in Africa.

  free markets & free trade for africa!

  Published: July 8, 2007 9:07 PM

• Christopher Hettinger

  Their article had one big mistake: Saying handouts helped Post-War Germany and Japan.

  It was not the "aid" but the free-market reforms that persons like Wilhelm Roepke inspired to create the "German Economic Miracle". I am not sure about Japan's case.

  Published: July 8, 2007 9:17 PM

• jl

  This is my take on Africa, from this and other articles I have seen.

  If property rights were enforced, then someone would be willing to invest in whatever was needed to serve customers and turn a profit: roads, factories, ports, whatever. But it is very difficult or impossible to gain title to any of these things. The government simply will not grant title or license to private property. Or if it does, it will later reneg and seize whatever wealth was created. People see this and avoid Africa. Even Africans themselves don't see much point in saving or accumulating capital since someone else will steal it, either through corruption or "theft by majority vote" as Gary North likes to put it.

  I have seen many stories where bad situations were alleviated when some form of private property was allowed. What will it take for change? I think to some extent people get the governments they deserve--they think there is someone richer who can be "soaked" for their benefit, and so socialist governments stay in place. It is said that even dictators depend on some level of popular support to stay in power. So until a great many Africans understand private property, and believe they are better of with it, not much will change.

  I've gone out on a limb here. I'm no Africa expert, never been there. So correct me if I'm wrong. Sometimes I think that a donation to mises.org will do more in the long run than any of the typical projects like building roads or feeding a village, because maybe the message will someday reach the right people and they will move in the direction of truly free markets and private property.

  Published: July 8, 2007 9:57 PM

• RogerM

  jl:"If property rights were enforced, then someone would be willing to invest in whatever was needed to serve customers and turn a profit: roads, factories, ports, whatever."

  You've got it exactly right. Africans send about $90 billion each year to the US and Europe for safe keeping. If Africa were safe for investing, that money would stay home, create new businesses and job and reduce poverty.

  Published: July 8, 2007 10:09 PM

• RogerM

  Also, the Mercatus Center at George Mason U has some good info on property rights and developent in Africa at http://www.enterpriseafrica.org/Publications/typeID.178/pub_byType_list.asp.

  Published: July 8, 2007 10:11 PM

• David

  Roger said

  'Africans send about $90 billion each year to the US and Europe for safe keeping. If Africa were safe for investing, that money would stay home, create new businesses and job and reduce poverty'.

  Hes right in principle. But he would do well to recognise that the bigger portion of that 90bn is being squyirrelled away by Legions of kleptocrats ( ie the political classes), proceeds of their taxes on their citizens, and its also a fair bet that a significant portion of that in turn is also Aid money anyway!

  Nowhere is this clearer than in the extreme case of Zimbabwe, whose latest absurdity is the forced halving, at the barrel of a gun, of all prices across the board. This policy approach is like treating tuberculosis by forbidding the patient to breathe, and it leaves me slack-jawed in complete amazement. But even the media reporting on the issue doesnt get it....they normally refer to the inflation 'problem' as 'the Mugabe government's biggest challenge' - its not a 'challenge', its a direct and inevitable consequence of printing money to pay your civil service and army!

  All of the problems of Statism that Mises.org is so good at criticising, are exemplified in, spades, in just about all African countries - even its 'freest' economy, South Africa, is riddled with interventionisms that hamstring its growth potential.

  Here is a comment I made on the same subject in another forum recently:

  Details nws, I cant shake the feeling that the biggest impediment to
  African development is our collective governments - Africa remains
  mired in poverty because that is the surest way for the ruling elites
  to retaIN THEIR power and influence. And when theyve got all the
  guns, constitutional or ballot solutions are meaningless. Ministries and civil service departments are best regarded as feeding grounds for priveleged officials.

  Left to themselves, people will find ways and means to improve their
  lots - they always have and they always will - everywhere, if they are merely left to their own devices. But African
  governments ( a generalisation, I know) are very good at impeding
  this process in a thousand different ways, leaving a citizenry
  convinced of its own helplessness and hence 'dependent' on the
  largesse of said governments at best, and fearful of violent
  retribution for stepping out of line at worst.

  I think part of the Aid/development solution is to channel whatever
  it is through NGOs, with the express proviso that the government of
  the country concerned is taken out of the loop completely. That way
  the funding and development would find its way to where its needed and wanted, (in response to local initiatives rather than imposed from outside) without being
  hijacked and used for powermongering or elite enrichment purposes.

  'course, that won't ever happen, because no governmemnt will allow
  anything that dilutes its percieved relevance , and any aid
  initiatives olf any nature that make government irrelevant will simply be refused ,
  however desperately the citizenry needs it.

  power grows out of a perception of dependence , and Afvrican
  governments desperately need to foster the idea that their
  citizens are helpless but for them. SO its no wonder that the last few decades have seen no meaningful change in the African affliction, simply because prosperity tends to undermine government power

  Africans by and large are not free, anywhere, but they are not
  imprisoned or oppressed by western governments - they are the slaves
  and prisoners of their own, often brutal, regimes. ANd its a fair
  bet that all aid channelled into Africa simply entrenches and
  perpetuates this oppression.

  Sadly, having outlined the nub of the problem, I have no idea how to
  solve it.

  a luta continua.

  Published: July 9, 2007 5:54 AM

• LukeM

  Keep in mind, also, that the billions African nations receive in loans are also accompanied by strict covenants that stifle capital accumulation and economic growth, etc. The Canadian economist Michel Chossudovsky has written about the exploitation perpetrated by the IMF, WTO and World Bank in his book "The Globalization of Poverty and the New World Order". If you're interested, it may be worth checking out..

  (I got a copy from my uni library a while ago, but I didn't get to finish the book. If I recall he wasn't the most laissez faire of economists, but I think his critique of the policies of the IMF, etc., was interesting and rather enlightening).

  Published: July 10, 2007 12:23 AM