Warning: This turned into a much longer post than I intended. I apologize for the length…

Unless you’ve been under a rock for the last couple of weeks, you probably heard about the huge, star-studded, Live 8 concerts, organized by Irish rocker Bob Geldof and staged all over the world. You may even have watched one or more of them. You may even have heard that Geldof has been nominated for the 2006 Nobel Peace Prize. The concerts did, after all, raise $100 million for the global struggle against poverty.

I have to say, though, that the concerts - and, to a far greater degree, all of the protests surrounding the G8 summit - are misguided, as are many other noble efforts, such as The ONE Campaign. I admire and applaud the intent of all of these groups, and salute the participants for giving of their time and energy. The problem is that none of the “solutions” proposed are both practical and valid. That is, the solutions - most of which boil down to throwing money at the problem - fall short in either having some attainable goal(s) or actually addressing the problem of poverty, or both.

Why do I say this? There are four major reasons.

First, consider what happens when the national debt of an underdeveloped or developing country is forgiven. If the leaders of that country are good, honest, and wise, then this can be a great help in bringing about economic health. However, many of the nations in which poverty is at its worst have few honest and well-intentioned leaders; corruption is often rampant, and power usually trumps morality. In many cases, the national treasury is little more than a piggy bank for a despot and his cronies. Not only does forgiving debt and sending huge amount of monetary aid mostly fund the despot, in this case, but it also secures regimes hostile to democracy and freedom. We have funded far too many nations, only to have them become enemies in later years, to continue to make this mistake. Cases in point: Afghanistan, Iraq, Iran, North Korea, etc.

Secondly, many of the poorest nations are essentially hamstrung by other constraints. Ill-conceived environmentalist causes, such the Kyoto Protocol (see JunkScience.com) or the ban on DDT (ditto) cost vast sums in money and human lives, for little or no benefit. Hard-nosed legislators pass embargos or travel bans on countries such as Cuba, depriving the world’s poorest farmers and entrepreneurs of critical markets (e.g., the United States), even when it is clear that such measures fail to acheive their supposed goals. Ironically, many of the most active participants in Live 8 and ONE are extremely active with Greenpeace and similar organizations, which are major forces behind many of these contraints (see this article).

Thirdly, there is a real lack of entrepreneurial drive in many of these nations. There are many entrepreneurs, of course, but not enough of them. Take, for a brief case study, Nigeria. The so-called “419” scams and similar forms of fraud constitute what is probably the largest national industry Nigeria has, because fraud is far easier - even tacitly endorsed by the government, or at least overlooked - than real entrepreneurship. Having lived in two underdeveloped countries and visited several others, I can tell you that very few young people in those places aspire to start a company, sink an oil well, open a newspaper, or become professionals. Most of them simply hope to find work at the local dock, school, or grocery store, or in some other dead-end form of labor. A very small minority aspire to run the local dock, school, or store. Certainly, this (poverty and lack of drive) is a self-perpetuating cycle, to some extent, but the general poverty level also makes it very easy, by Western standards, to get ahead. An individual making $75,000 a year, in most of these places, could live like royalty, and $30,000 would provide for a generally very good lifestyle, but few people have the drive to pursue even this level of prosperity.

Let me be very clear: I am not criticizing the countless millions who do not have or do not see opportunities to better their situations. I am saying, however, that many of the world’s poor do have opportunities, but simply do not see them. This problem will not be solved by throwing money at it or forgiving debts; this problem is one of education and foreign investments, not disbursements. That is, if you want to inspire business development in a poor nation, the way to do it is not to offer $10,000 or $10,000,000 to would-be entrepreneurs; the way to do it is to have existing, foreign businesses and businesspeople partner with the citizens of the poorer nation, to bring experience and vision to the process. Many of the people I have met in poorer countries who do have an entrepreneurial vision still lack depth of vision; they fail to see opportunities to grow a business beyond that one store, even if it would be easy to do so. A trained, opportunistic, capitalist mindset can actually come in handy, here.

Fourthly and finally, there is this old, but entirely valid, proverb: “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” Surely, with a massive, concerted money-dump, the Group of 8 nations could eliminate poverty in all but the most oppressed nations for several, maybe many, years. But, then what? Some of the farmers who scratch the soil in Africa, today, with little to show for it, would certainly take advantage of the time and resources this money dump would provide to learn new skills, while adequately feeding their families, for once. A great many others, though, having never known anything of self-sufficiency and “bootstrapping,” would simply continue on as before, and be in worse shape than ever when the aid money ran out. In other words, the G8 nations would have created a whole slew of welfare states, in a single broad stroke. On top of this, money by itself does nothing to persuade people of the preventability of HIV/AIDS, Ebola, and countless other diseases. In many cases, public officials are not only not helping prevent public health disasters, but they are active parts of the problem. A raw money-dump, without investments of time and personnel, would be an incredible disservice to the world’s poor.

Many of these problems apply just as much to foreign leaders as to foreign business; some of the people running the world’s countries (including some of the richest countries), frankly, don’t know very much about what in the world they’re doing. I’m not sure how to fix this one without starting WWIII, but that’s a topic for some other time.

My point in all of this is simple: the world’s richest nations - and the world’s richest individuals, meaning Westerners as a group - certainly need to work together to eliminate poverty. However, the simplistic message of Live 8, ONE, and similar groups - “Please send money” - is far from adequate. Global poverty is a result of systemic problems, at many levels, against which money is impotent. Fortunately, I think the G8 leaders mostly realize this, so I am hopeful they will resist the urge to sqaunder vast sums of money in a fit of compassion. I hope, though, that Live 8 and the associated protests will help these leaders to think about real solutions, instead.

This entry was posted on Wednesday, July 6th, 2005 at 11:25 pm and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.