TCS Daily

The Folk Song Army Sings Africa

By Arnold Kling - July 8, 2005 12:00 AM

"We are the Folk Song Army.
Everyone of us cares.
We all hate poverty, war, and injustice,
Unlike the rest of you squares."

-- Tom Lehrer


Forty years ago, "The Folk Song Army," by singer-satirist Tom Lehrer, captured the smugness of Live 8 and the demonstrators at the G-8 summit. One self-described activist says that flying to Scotland, where the summit is meeting, "shows you that people are passionate about ending poverty..." Unlike the rest of you squares.


What does the Folk Song Army propose to do about African poverty? The economic theory of Live 8 was captured by columnist Anne Applebaum: "millionaire rapper Snoop Dogg shouts that 'there's a lot of rich people in the world and a lot of them are just selfish!"


The view of most economists is quite different. The position of the squares was summed up over a year ago by Robert Lucas:


"of the vast increase in the well-being of hundreds of millions of people that has occurred in the 200-year course of the industrial revolution to date, virtually none of it can be attributed to the direct redistribution of resources from rich to poor. The potential for improving the lives of poor people by finding different ways of distributing current production is nothing compared to the apparently limitless potential of increasing production."


In short, the Folk Song Army believes that redistribution will cure poverty. The squares believe that market institutions will cure poverty. Most of the emotion seems to be on the side of the Folk Song Army. Most of the evidence seems to be on the side of the squares.


Folk Economics


Two years ago, economist Paul Rubin published a paper called Folk Economics (note: payment or subscription required). As this description points out, Rubin suggests that in a hunter-gatherer tribe, goods are exchanged mostly through sharing and reciprocal altruism. There were no visible gains from impersonal trade or economic growth. In this zero-sum environment, people evolved an instinct to resent and punish those who took too much.


Rubin's thesis is that the instincts that evolved in prehistoric tribes account for the misguided "folk economics" that many people believe today. Anti-globalization and opposition to free trade reflect the fear of strangers that was inherent in tribal society. Resentment of the rich and a belief in redistribution reflect the hunter-gatherer's zero-sum thinking.


In a well-functioning modern economy, wealth is created rather than stolen. People develop new technologies, new ways of satisfying human wants, and more efficient ways of producing and distributing goods and services. As the quote from Lucas indicates, we owe our well-being to this process of economic growth, not to redistribution.


The Folk Song Army blames the plight of the poor in Africa on the wealth of the rich in other countries. The squares believe that the desire for wealth, if it is pursued in a market setting rather than as a government ruler, can improve everyone's lot. Redistribution is not effective at ending poverty.


In fact, redistribution can be counterproductive. It can serve to foster dependency while keeping entrenched bad leadership and harmful policies. An article in Der Spiegel notes that "today there are increasing numbers of Africans who call for an end to this sort of support. They believe that it simply benefits a paternalistic economy, supports corruption, weakens trade and places Africans into the degrading position of having to accept charity. 'Just stop this terrible aid,' says the Kenyan economic expert James Shikwati."


Moeletsi Mbeki, brother of South Africa's President, believes that abuse and exploitation by Africa's political elites plays a major role in the continent's underdevelopment. Mbeki recently wrote,


"Merely handing more aid money to African governments only reinforces the pattern of abuse. The key to development lies in a dynamic private sector. For a country to produce more, private individuals must generate savings and plow those savings back into the production process in the form of new and improved techniques, processes and products."


Do Your Part


It is fine to be passionate about wanting to eliminate poverty. Here are some thoughts about how you can do your part.


1. The world is a complex place. The farther you are removed from a situation, the less likely that your intervention there will do good and the greater risk that it will cause harm. No matter how thoughtfully it is administered, long-distance aid will tend to be ineffective.


2. The easiest poverty to prevent is poverty that is close by. By developing useful skills and remaining employed, you can help keep yourself and your family out of poverty. That makes you less of a burden on the world than if you fly half way around the world to stage confrontations.


3. Learn to distinguish motives from consequences. A well-meaning policy can backfire. The seemingly cold-hearted impersonal market is enormously beneficial.


4. Poverty is not a simple problem. See What Causes Prosperity?


5. Remember that unlike the Folk Song Army of Tom Lehrer's song, you have no monopoly on good intentions. A morality play in which those who care crusade against those who are square makes for great theater. However, it is not a realistic basis for economic policy.


Arnold Kling is the author of Learning Economics.


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