TCS Daily


The Bottom Billion No More?

By Nick Schulz - August 20, 2007 12:00 AM

Paul Collier is the author of an important new book, The Bottom Billion: Why the Poorest Countries are Failing and What Can be Done About It. He is Professor of Economics and Director of the Center for the Study of African Economies at Oxford University. And he is former director of development research at the World Bank and advisor to the British government's Commission on Africa. He recently was interviewed by TCS editor Nick Schulz.

Schulz: As bad as things are for the bottom billion, you believe it's possible that the statistics we have to describe what is happening may in fact underestimate the decline that has happened with the world's worst off nations. So how bad is it?

Collier: How bad is bad? Everything has to be seen relative to where the rest of the world is, since information has now globalized. If we were all still living in the 14th century then the present conditions in the bottom billion would be OK, but we are not. Both practical living conditions and more important psychological matters such as the lack of hope in these societies are unacceptable and potentially explosive.

Schulz: When you directed the World Bank's research department, the most controversial paper you produced was called "Growth is Good for the Poor." Explain why the notion was so controversial and what you learned from the whole controversy.

Collier: Development policy has become a plaything of our own internal politics. Obviously in western societies the left is interested in distributional issues. As far as internal western politics is concerned I have no problem with these concerns, but they become radically over-extended when stretched to cover development issues. I think the antipathy to the paper entitled 'growth is good for the poor' was predominantly because some people didn't want it to be true -- they wanted redistribution to be the only way to help the poor. Additionally, they wanted to see global capitalism as unambiguously evil.

Schulz: You write about the importance of security in post-conflict societies in order to prevent relapse and "conflict traps" that make progress impossible. You say: "Security in post-conflict societies will normally require an external military presence for a long time. Both sending and recipient governments should expect this presence to last for around a decade..." Discuss what your analysis means today, or should mean, for Iraq and for the developed world's involvement there?

Collier: Unfortunately, Iraq is not an example of peace following a civil war, but of a civil war following the brief peace that followed an international war. Civil wars tend to last a long time because it is difficult to get a peace deal that all parties trust.

Schulz: You argue that we must get more comfortable infringing on sovereignty. At this point in time, given the problems in Iraq, that's obviously a tough sell. Explain why sovereignty infringement is important nonetheless.
<!--[endif]-->

Collier: I don't think that your characterization 'we must get more comfortable...' gets my argument quite right.

I estimate that most of the costs of internal conflict are borne by neighbors. Hence, it is the countries within the insecure regions, notably Africa and Central Asia, that should themselves reassess whether they want absolute national sovereignty. A concept of sovereignty for the 21st century would, I think, lodge some rights with neighborhoods, especially during the high-risk phase following a civil war. I don't think that this should be conceptualized as an infringement on sovereignty - it simply gets the balance of rights better matched against the costs. Nations have a right to protect themselves against the damaging actions of others and so neighborhoods have the right to set limits on the actions of their member national governments. Iraq has made this evolution of the concept of sovereignty much harder because it has rekindled what had been a dead issue and so pushed citizens of small, weak countries back into the defensive mindset of absolute national sovereignty.

Schulz: My colleague Arnold Kling and I have discussed an idea that underdevelopment persists in part because certain countries are held back by invisible liabilities -- these include institutional and cultural impediments to innovation and productivity. For example, consider a culture that rewards corruption instead of productive activity. In your book you point out that vested interests in underdeveloped countries oppose changes that would permit these countries to turn a development corner. Can you give us some examples that illustrate this?

Collier: I am skeptical of cultural explanations of development traps. Asia was supposed to be locked in such a trap! Vested interests are not about culture, they are about interests. Of course vested interests trap many developing countries - just look at the customs service as an example, extorting and delaying trade for its own personal benefit. The customs service in Madagascar is my favorite example - working for it was so lucrative that the bribe to get into the training school was fifty times per capita annual income. Or take telecoms monopolies trying to block the provision of competing networks. I'm just back from Ghana where the key impediment to call centers - which could generate thousands of jobs - is restrictive telecoms services. But to understand vested interests you don't need to conjure up subtle theories of cultural difference - just extrapolate from the US farm lobby and you'll get the picture.

Schulz: Hernando de Soto has fingered the problem of "dead capital" in underdevelopment - the absence of titling and rule of law protections for property makes growth and development extremely difficult. In your estimation, how important is this?
<!--[if !supportLineBreakNewLine]-->
<!--[endif]-->Collier: I don't know. I am sympathetic but I suspect that as far as providing titles to informally held property, which is his key idea, it is a little exaggerated. My doubts are twofold. First, I don't really see finance as the binding constraint in these societies: precisely because they have been stagnant their firms are often relatively liquid. Financial constraints really start to bind only once growth is already quite rapid - figure out how growth creates problems for a firm's balance sheet and if you still don't get it ask a finance director.
<!--[endif]-->

Second, I think that the role of the informal sector is overplayed. Development will need large firms - this is where the driving force of rapid growth will come, even if most employment remains informal. The bottom billion have too few large firms and too much informal activity. However, a team at my research center are currently evaluating the provision of informal property rights, and it may turn out that the payoff is bigger than I imagined. I would back well-founded research results over hunches any day.

Schulz: In his book The Power of Productivity, William Lewis of McKinsey's Global Institute makes an interesting point. He says that many developing countries have very large bureaucratic states, much larger than Britain and the US, say, had at the time of their development. He points out one challenge such large bureaucratic states generate: by needing revenues to sustain it, they pose a threat to emerging legitimate businesses and industries -- by seeing them as tax cows -- and make black market activity much more economically attractive. This stunts legitimate economic development. Do you also see this as a problem?

Collier: I think that the large state/small state issue is not the best way to formulate the question. The right size of government will vary a lot between countries depending, in particular, upon the costs of government revenue. In resource-rich countries there is so much revenue that the state is inevitably going to be large. The issue is not to shrink it but to make it as effective as possible. In resource-scarce low-income states I tend to favor low taxation, because the costs of taxation rapidly become prohibitive in the presence of corrupt tax administrations. The conventional counter-argument is that without high taxation citizens are not provoked into scrutiny of government. This is the cruel dilemma, but I would generally favor alternative ways of generating effective scrutiny.
<!--[if !supportLineBreakNewLine]-->
<!--[endif]-->Schulz: Many free market advocates see trade with the developing world as a path forward for the poor. But you argue it might make matters worse by locking many of these countries into natural resource dependence -- the so-called natural resource curse. So should the developed world give up on trade with the developing world? What should be done?

Collier: Of course we should not give up on trade with the bottom billion. There are two key actions. One is to clean up our act in resource extraction. The days of corrupt deals with ministers must be decisively ended. Citizens of these countries have the right to expect that we will not connive at the corruption of their public officials and we have the duty to enforce this stringently. I would like to see an OECD-wide requirement that our resource extraction companies should only enter into contracts won through internationally verified auctions and I would like to see an international charter of standards for the effective spending of resource revenues. The IFIs have masses of standards and codes, but they are designed for OECD or emerging market concerns, not for the bottom billion.

The other action is to shoe-horn Africa into more diversified exports by giving it a helping hand through access to our markets. The US has done this through AGOA and it has been a big success, expanding African garments exports to the US sevenfold in five years, but unfortunately Europe has not matched US actions. Its own trade scheme, 'Everything-but-Arms' might better be called 'Everything-but-Manufactures' because it is so restrictive. The US should start pressuring the EU to match US actions. Try this next time Europe starts giving you a lecture on the need for the US to behave better.

Schulz: You present your argument as something of a midway point between Jeff Sachs -- whom you say focuses too much on aid as a solution -- and William Easterly -- whom you say overstates the problems caused by aid and "neglects the scope for other policies." Let me come to Easterly's aid (no pun intended here) for a moment. Is it fair to say that the 'more aid' paradigm is, by far, the dominant model in the development biz? If so, this may explain why Easterly focuses as much as he does on the failure of aid. Is that fair? Discuss.
<!--[endif]-->

Collier: You better ask Bill why he focuses so heavily on aid. As you suggest, I certainly see the near-exclusive focus on aid as a problem, crowding out other important policies. The Bill-Jeff debate in a sense intensified that problem by making it seem as if this was the only development issue that mattered.

Schulz: Easterly argues that we need much more in the way of trial and error processes to know what can work in development efforts and what won't. Do you share this view?
<!--[endif]-->

Collier: Very much so. While at the Bank I repeated spoke up for aid projects to be run as 'evaluated experiments' and so be a basis from which governments themselves could learn. I want to stress that last part - the key audience for evaluation should be the governments and societies of the bottom billion, not the aid agencies, and this in turn implies radical changes in how evaluations are conducted. The keys problems in evaluation are not technical, as imagined by the current generation of academic economists, but rather the total failure of evaluations to influence opinion in recipient countries.

Schulz: What is your favorite development success story?

Collier: The restoration of peace in Sierra Leone thanks to a few hundred British troops
requested by the government. That was a small intervention with a very big pay-
off.

Schulz: What country or countries do you think are best positioned to turn the corner in the near future? Which ones are you excited about and why?

Collier: Economists, even eminent ones, have a spectacular record of mis-predicting turnarounds. Among the Nobel Prize winners, Myrdal said that Indonesia could never develop - it began its success the very next year; and Meade said Mauritius was doomed - it became Africa's most successful economy. That's basically because all these societies have brave people wanting change and so at any time a little group of them can gain enough influence to make a difference. Where looks particularly promising? Tanzania, for one, has a new and business-friendly president who is trying to make a difference. But even Zimbabwe could turn on a dime.

Schulz: Are you optimistic or pessimistic about the fate of the bottom billion over the next 50 years?
<!--[if !supportLineBreakNewLine]-->
<!--[endif]-->Collier: I wrote The Bottom Billion because I was pessimistic - I saw that with business as usual in fifty years the problem would become a nightmare. But this was an entirely avoidable nightmare. Far more daunting problems have been surmounted, and if we get serious we can readily surmount this one. The book sketched a practical agenda for action grounded on a mass of applied statistical research and thirty years of experience. I have been hugely encouraged by the reception of The Bottom Billion: it has been warmly greeted across the political spectrum and it has become a best-seller. This has revealed that there is a massive pent-up demand for serious action and the basis for a new political consensus that can make action possible. And so, I am much more optimistic than when I penned the last sentence of the book.

Schulz: Thanks for sharing your thoughts.

Collier: Thank you.



Categories:

25 Comments

Resource limitations
First, which bottom bilion are we talking about? The bottom billion Chinese? The bottom billion Indians? Or the bottom billion Africans? All are at the ragged edge of existence currently.

I will spot you the argument that there is probably a best way to get to there from here-- to take these people in their existing state and include them in some sort of job-based consumer economy. Theoretically, that's quite possible.

But how many cars will we have to build, for those three billion to drive? How many TV sets and cell phones? How many refrigeratprs? And how much power at the outlet, available to run all these modern wonders?

Or is the plan top tell them all the resources just got used up, and maybe they will prevail in the next, more glorious life?

Here's a start: Do the calculation for how many acres we will need to cultivate to provide food for, say, seven billion people. And biofuel for maybe two billion autos and trucks.

Then tell us how many acre-feet of water those acres will require each year to provide their bounty.

If you can fit all this into our one earth, you've discovered something no one else has when they've tried those calculations. We all won't fit! Not unless half of us continue to starve.

Always the pessimist.
There is only one reason anyone on the earth starves today: government.

Either government steals the land from those who know how to raise food as in Zimbabwe or it denies capital improvements as in DPRK or Cuba. Or governments out right steal food aid.
Or it subsidizes crops or provides protective tariffs.

There is more than enough capacity and capability to raise as much food as needed.

And when technology is applied to improve yields, governments ban that technology.

We will indeed have 10 billion...
Food and medicines are relatively cheap to produce and our logistical (transportation) resources and infrastructure are improving daily. We will reach 10 billion people within the near term horizon and that number absolutely assumes we will be able to feed them and that their life expectancies will continue to improve. So let's get past that foolish argument. We need not know (today) how we will do this. We need only know that this part of the job is not so very difficult in the modern world and we will deal with those issues as they come up. We know this is true because it is of life and death importance.

The real question is how do we bring the standard of living for the poorest among us up to something we ourselves all find reasonable for humans?

Nothing in this world can be created and sustained without perpetuating itself and throwing a profit. There must be money in it or it will surely fail. Endeavors that run at a loss eventually run out of resources. Aid to developing nations is simply consumed (by someone over there) and it does not matter very much who gets their hands on it first if such money does not fund the working capital to underwrite entities that create wealth.

It follows that financial capitalism alone is in the position to afford people the structures and mechanisms to become competitive in the global economy. We must know that these people will figure out how to engage capitalism within the context of their own social behavior paradigms. Such business entities will surely evolve.

They might not obey the same rules that seem necessary for American style economics to operate. But they need not. Democracy could be inappropriate for many cultures. An open system with a strong central government and the enforcable rule of law might be impossible in many places...so they will create wealth by converting their own cheap labor into high margin export goods, entering global industries and without waiting for their politicians to behave.

Why? Because they must. Because they have no other choice than to watch their children grow up without hope. And because someone will have figured out how to make mountains of money facilitating that process.

Just as these people will have enough food and medicine to survive, they will invent business routines to create and hold onto their own wealth. Once they have that power over their own lives...they will not be giving it back.

If this seems impossible to you...it is no less inevitable for them.

So let's stop agonizing about how this cannot be done. It will be done! Let's focus on how this might occur. When we understand those fundamental processes then we should make them happen sooner.

Something less than total certainty
"We know this is true because it is of life and death importance."

I don't see how this logically follows. We will survive because we MUST survive? I think there's a flaw there.

Naturally as the future unfolds, all our efforts will increasingly be devoted to stemming the tide of want. So we have no choice but to "focus on how this [solution] might occur". But let's also be fully cognizant of the immensity of the task.

Aquifers are being very rapidly depleted, the population is increasing and more and more of the have-nots are insisting that they be among the have-somethings... and a basic need of mankind is just food and water. Once the demand line crosses the supply line, desperate resource wars are bound to occur involving not just millions, but billions of desperate people. And this in a world that has devoted the majority of its technological wizardry to the development of better and better ways of killing people, including the nuclear option. Which we insist on keeping on the table.

I think there's cause to at least conceive of a highly uncertain outcome to all this. It might be naive to assume automatically that we will just invent something in the nick of time, and save the day. That's the Hollywood version.

I do note that this is not at all a popular subject. You and I are virtually alone here, where other subjects get hundreds of postings. It appears to be something many do not want to think about.

With free markets, supply meets demand.
As long as you apply socialism to the the demand side, there will never be enough supply.

Have you notice 70% of the Earth is covered in water?

As for aquifer depletion, that is the fault of government controls. If you owned the water under your land, wouldn't you like a say who will buy it? Would you sell it at a discount to farmers in a desert who want to irrigate their rice?

Technological wizardry
http://www.firstwaterinc.com/products.html

Better and better ways to make clean drinking water.

BTW, nuclear submarines have the cleanest water in the world from their 'stills operated by nuclear power.

Food, water and medicine...
Food, potable water and medicine are relatively inexpensive to produce and distribute. By definition, when we do get to 10 billion people then we were able to feed them. Unless we suddenly forget how to do that then we will continue to do so into perpetuity...even if production costs rise. In that case there will be more money to be made in the food industry and, therefore, more technical innovation...for the moment food is a low-margin commodity that we generate in an immense excess of our biological needs, worldwide. Same with fresh water.

Of course, the technology for everyone to live and consume like Americans has not been developed. The rest of the world cannot live the way we do today. Indeed, we might not be able to continue living quite this well (or to consume with this much waste) ourselves.

Nevertheless, we are a long way from that day regarding the 1 billion people living at the bottom of global society. It is not about feeding them...it is about including them in our wealth-creating game and giving them a vehicle into the economic arena. We might even think to do a better job for American workers as we work through all this. It is not exactly Heaven on Earth for everyone living here, you know...



resources
That is an argument from 'Malthus' and has been disproved time and again. Thinkers one and two hundred years ago just could not image that so many people as we now have, could be living so good. Also, all those bottom billions, most are really starving, they're just poorer than guilt ridden spoilt self-loathing westerners think they shoyld be. And more and mor are improving out of poverty and anyone who visits those crappy places keeps mentioning. I realize there is a big problem tho with the left wingers who don't really like people too much and wish there were many less.

Things money can't buy
"Food, potable water and medicine are relatively inexpensive to produce and distribute."

Actually they're not, in the sense that already they're priced above what their potential market can afford to pay. The world has a population of 6.6 billion at the moment. But it's only "supporting" about 3-1/2 billion. The others-- three billion, not one billion, are just scuffling to get by.

By the time we get to that anticipated world of nine billion the major rivers, aquifers and other freshwater sources will all have been degraded. Crops are just water incarnate, so it's fairly easy to see there will be only a distant chance of greater yields. If we're still supporting 3-1/2 billion in a state of affluence, they will be eating in front of another 5-1/2 billion with empty stomachs.

Plus, rich people bidding up the price of energy crops will take away the cheap food available to those with less than two dollars a day in income. So the price of everything will be increasing greatly, and a portion of the crops coming up will not be used for food.

Will cheap desalinated ocean water save us? What do you think the big deal is over developing new sources of energy? We're coming to a pinch point, with energy shortages, not cash flow, determining the limits of development. We have dwindling resources becoming more expensive every year-- and increasing numbers of hungry people with no money in their pockets.

Plus, we have drying continents now, particularly Africa. If the monsoons fail in Asia as well there will be global calamity.

I'd like to join you in seeing this as purely a problem in economics. But it's obvious that we're entering a world where the cost of things is going to be rising fast, and only the fortunate will be in the bidding for them. That's a recipe for a very dysfunctional world.

The planet's only so big
The Malthusian argument has not been disproved. It just seems that way to you because you live in the world of the haves. For three billion of us on the planet, the necessities of life are already unaffordable.

And the trend is for scarcity to force an increase in the price of every necessity. Gasoline just doubled in price in the space of a year. What happens when it reaches ten bucks a gallon?

I'll tell you. Only the people with ten bucks in their pockets will be driving anywhere.

We all can't live it up as rich people, because the planet can't produce enough stuff to satisfy all of us. That's what rising prices do. They limit "demand" in an environment where people are struggling to consume enough to stay alive. You don't see skinny people just because you don't hang out in those places. But they're there. And we're making more of them every day.

Need more governments to start murdering people again?
If you work out the math, the entire world's population would comfortably fit on the continent of Austrailia.

Of course you would have to have a world socialist dictatorship to force everyone to Austrailia, but that is another issue.

You continue to ignore the primary reason why there are limits to growth, government.

If gas goes to $10 per gallon, based on MARKET conditions, not taxes, markets will find cheaper alternatives to gasoline just as the markets found cheaper alternatives to whale oil a century ago.

History has documented free markets will resolve the issues of scarcity yet you refuse to acknowledge their power.

Why do you prefer to ignore history?

My only conclusion is you want more government control of the world, which has been proven by the USSR and China to create more poverty and misery. Or do you want more government control so they can murder more people so you will have enough to live?

Intuition versus demonstration...
Dietmar,

It is, indeed, intuitive for well-meaning folks to imagine that we will all run out of the global resources to support ever larger populations...and that, therefore, we must limit the number of people involved.

However, we have not yet come to the point that we are able to calculate how many people would be too many people...so you are correct in saying that the folks who are concerned, in this way, want fewer of us around than there probably might be otherwise...on the theory that for many of them the quality of life would not be worth living or that they might rise up and kill us all...

Nevertheless, global financial capitalism is rapidly creating immense wealth in the developing world and the food, water, medicine technologies (our ability to produce a substantial excess) are well in hand.

By going back and agonizing over problems that we have already solved, however, we lose the opportunity to address more interesting problems...such as how will financial economics operate in those places without much of a central government (or with predatory politicians)?

I argue that fundamental business practice evolution is inevitable. If we get over certain near term concerns (such as raw population size) and simply assume (correctly) that there will be 10 billion people sometime soon and that they will become active players within the global economy then we might logically project how such local economies will probably behave. So then we will be able to facilitate those transitions sooner than later. The sooner the better.

By they way, Dietmar, how've you been?

Poverty and Wealth
It is wealth that is unusual and new, not poverty. Anyone who knows anything about world history knows this. Those who do not know this think the wealthy get so from off the poor, that there is some past utopia we should all get back to, and that redistribution of wealth works. None of these are true. Poverty is the original state of man -- wealth was created later. And that welath has increased for every group of people who have had peaceful contact with other groups. Only when we acknowledge the truth, that poverty is the natural state of man, and that we have gotten wealthier over time, to the benefit of everyone, will we be in the position to really allow more people to become wealthy. Until then, socialist-minded people will continue to work to keep the poor improverished.

The poor will just buy beer anyway
"In Madagascar, Mr. McAleer finds Mark Fenn, country director for the World Wide Fund for Nature, who argues that the poor are just as happy as the rich because they smile more and that if Madagascar locals (who now earn $100 a month) get more money "they'll buy cases of beer, invite their friends, they'll throw a party . . . three, four days the money's gone." He then shows off his new $35,000 catamaran."

http://www.opinionjournal.com/diary/?id=110010500

Another example of socialists trying to keep the people poor.

Eating the planet
I hate to butt in on what looks like a private conversation... but we're really not looking for ways to kill off billions of people. We're just trying to point out some facts about life on this planet.

You say we don't yet know how many people the place can support. But haven't you noticed that it only actually supports something between three and four billion of us right now? The reast are just hanging on for ear life, with no visible means of support.

And we are doing so unsustainably. We would not be enjoying our present high standard of living if we were not spending down the world's one-time allotment of fossil fuels and wealth of life forms. Topsoil, groundwater... there are any number of categories where we are running through our grandchildren's patrimony like there's no tomorrow.

So far, what we know with an absolute certainty is that the planet will sustain even a population of three to four billion IF we muster the political will to determine practical limits to growth, AND we find and employ new technology carefully, to preserve what we have left.

The oceans only contain around ten percent of the populations of commercial species we had sixty years ago. And with acidification, a third of our coral reefs have become degraded or dead in the same time. Just in my lifetime the world has become a much poorer place.

I would think there might be greater enthusiasm for preserving what we have left than you display. Look at the world's great empires of 2,000 years ago-- the ones people say now "are all dust". Go there and take a look. More accurately, they're all now bare, infertile dirt. Their natural resources have been mismanaged.

Zimbabwe
Why are people NOW starving in Zimbabwe and they were NOT a few years ago?

The limits to growth are those created by government control of markets.

You REFUSE to acknowledge that.

Roy...
Food is essentially upgraded sunlight, water and air. One byproduct of this process is soil. All of these (agricultural) businesses produce commodities with small profit margins. Crops in the field are dirt cheap.

Many people in the world produce their own food and live a season to season existence because they have no other work. However, when they do have jobs then they make more money doing that than they might by farming...because agriculture is simply not a great money-maker.

Small plot agriculture is inefficient, but if you have the time (with nothing better to do) and if you have no money to buy food then your choices are limited.

When an economy develops by converting its cheap labor into export dollars, however, the agricultural sector consolidates, farming entities buy tractors and better seed, etc. There is still no money in this but the larger players make up for that with production scale and (ultimately) with real estate development.

The problem you see in poor countries is that they have no work other than subsistance farming...and they are vulnerable to crop failure...because they have no money to buy food (such as imported rice) otherwise. Of course, crops do fail...all over the world...even in Iowa...from time to time. Weather. (Not global warming...just plain old weather.) When that happens the underdeveloped nations need help. Such a thing occurs somewhere in the world every year. In certain terrible places more often than others, but always somewhere.

CNN is right there to make us believe that this is the way everyone in the third world lives all the time. (Civil wars disrupt farming even more than bad weather does...and we seem to have that foolishness going on every year too.)

The answer is not fewer people. The answer is economic development. Fewer poor people. Fewer people who must scratch a living from the soil or risk starving to death.

In general, more people would be a very desirable thing...I like people. People are cool.

Even with a very much smaller global population...without a healthy economy and the extra money to buy food (from someone who has more than he needs) when your own crops fail or the fishing is bad...your people will starve. This was true for all of us 500 years ago, 5000 years ago and 50,000 years ago.

It would be true today for everyone in America if the trucks stopped running. We don't have three days worth of food and water on hand in the case of any sort of emergency. And almost none of us knows the first thing about farming.

We would be eating the dogs by the end of the week. At least the Africans have their goats to BBQ when the going gets rough.

I like people too.
Besides all the 'clap-trap'(this is sarcasm) about value human life and all, people think. They have ideas. Each person is unique. The more people we have, and the more ideas we have to make life better.

Unless, of course, they are stuck in a socialist system that does not respect individual rights, or intellectual property rights or any property rights. Then people are just cogs in a wheel that must be fed and cared for. A burden on society instead of an asset.

big planet
I should have said, most people in the world ARENT dying of starvation. Crappy writing and editing. But I still dispute that malthus has not been disproven. We have never run out of anything at all. If you say some necessities are unabfordable like some isolated places like Zimbabwe, or north korea, that's a different problem than the malthusian argument. Those isolated places are the results of crappy governments, not any limitations re land etc. Also, it's not that because i am wealthier than most that I don't see other people around the world. In fact I have travelled all over the place, and have noticed that mostly people are indeed becoming better off in most places. But most spoilt westerners think that all people should immediately have plasma TVs and cars etc. But it didn't happen with westerners either, and is certainly no 'right' that all poor people in the world have everythng right away. Nobody can ever know how well off everybody in the world can become, but we do know what it takes to start to become better off, for empirical reasons, not theoretical ones; it's freedom to make your own choices, instead of depending of the dictats of faceless snivelling beaurocrats.

Zambia
I don't know whether you've noticed, but countries like Zambia have been trying to convert their cheap labor into export dollars for years. In desperation, having tried the socialist, self sufficiency route, they've then bought into the globalization story. And it has gotten them nothing.

Nobody's buying their stuff. Re agricultural products, their neighbors are all broke, and Europe is too far away. And bulk commodities like corn have to compete with heavily subsidised Euro and US products, where they can't gain a foothold.

Their textile markets, once thriving, have collapsed because they can't compete with China. So what would you suggest they do?

In any case, these near-term situations have little if anything to do with what I've been talking about. Go beyond the next decade and small sums of cash won't be able to help everyone. First, there just won't be enough food to go around. Second, energy-intensive modern capital farming methods will dictate that globally distributed foodstocks, grown with heavily machanized methods artificial fertilizers, herbicides and insecticides, will be priced far above the ability of the non-first worlder to pay for them. You know the prices for all these things are set to double, and to double again.

All Zambia has to do is to cut wages, and undercut the Chinese. Then they'll be competitive, paying their labor forty cents an hour in an era of nine dollar gas. They'll be eating artichokes from France.

Zambia v Mauritius v Bostwana
"Corruption is a serious problem. The regulatory environment is not protective of business, and commercial licensing procedures are notably slow. The government has streamlined foreign investment procedures, but capital is still subject to extensive restrictions."

" Zambia experienced steadily declining income from 1974 to 1990 as a result of falling copper prices, a bloated civil service, HIV/AIDS, government mismanagement, inefficient state-owned enterprises, and corruption. Beginning in 1991, the government began to implement reforms to improve macroeconomic policies and reduce its intervention in the economy, including privatizing Zambia Consolidated Copper Mines. Nevertheless, the public sector remains excessive, efforts to improve the business climate and adopt a new investment code have stalled, and an anti-corruption initiative has had only limited success. Most of the population relies on subsistence agriculture, and copper accounts for most export earnings."


"Mauritius enjoys high levels of investment freedom, property rights, business freedom, trade freedom, labor freedom, fiscal freedom, and freedom from government. The environment is business-friendly, and licensing procedures are simple. Virtually all commercial operations are efficient and transparent. Foreign investment is actively promoted, although land ownership is restricted to arbitration on a case-by-case basis. The top income and corporate tax rates are moderate, and government expenditures are moderate as a percentage of GDP. The judiciary, independent of politics and relatively free of corruption, is able to protect property rights exceptionally well."

" With a well-developed legal and commercial infrastructure and a long tradition of entrepreneurship and representative government, Mauritius has one of Africa's strongest economies. Sugar and textiles, the traditional economic mainstays, are facing stronger international competition and the erosion of trade preferences, which has undermined growth in recent years and led to increased unemployment. The government is addressing this problem through business-friendly policies, training, and attempting to diversify the economy by promoting information and communication technology, financial and business services, seafood processing and exports, and free trade zones."

Botswana is an economic regional leader, scoring highly in property rights, investment freedom, financial freedom, and labor freedom. Labor freedom is strong, thanks to ease of hiring and firing employees. The financial sector is a regional leader, with an independent central bank and little government intervention. Businesses take a longer than average time to open, and licenses are sometimes subject to burdensome regulation. The overall business climate is superior for Africa but also is a model for the world.

http://www.heritage.org/research/features/index/country.cfm?id=Zambia

Maybe Zambia can follow the examples of other courntries in the region, except Zimbabwe.

"won't be enough food to go around" : Prove it.
Back up your wild assertions.

Zambia list of tries
In your lists of all the things Zambia has tried, you forgot to mention the one thing they didn't try; namely, real economic freedom. All the things they tried were 'big-government' dirigiste policies. Instead of their filthy kleptocrats since independance would would the place probably be like if there were a team of old retired guys from say, one from HOng Kong, one from Singpore, one from Taiwan. Do you think that Zambia would not also be such a successful country? Now let's pretend that we don't have that foreign team, but locals who just have the same policies as those countries; what would probably happen?

Do, or do not.
There is no try.

Yoda

Blue glow
Is it not strange driving around rural Philippines at night and noting the blue glow of a TV from their nipa hut?

TCS Daily Archives