Reducing trade barriers is far more effective at improving the quality of life for those in poor areas of the world than sending aid or technocrats to help design government programs. To get serious about eradicating poverty, countries should pursue policies of economic freedom. Because, ultimately, countries don’t fight poverty. Individuals free of excessive regulations and able to participate in global trade do.
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Samizdata quote of the dayNovember 1st, 2017 |
 18 comments to Samizdata quote of the day |
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What about all those ‘Wars on Poverty’, then? Are you telling me that some government actions are not 100% successful? This is shocking news. I’ll just have a lie-down to recover. But reassure me- the War on Drugs is being won by the right side, yes?
Next you’ll be suggesting that Governments only fight unstoppable wars to gain more power for themselves!! You are such a cynic!
Nicholas, don’t forget gun control and how successful it has been at disarming criminals, especially terrorists.
And madmen, too.
But keeping up trade barriers puts money in the hands of vocal and wealthy special interests at home and sending aid and bureaucrats also puts money into the hands of interested parties at home.
Getting rid of trade barriers just helps everyone in a diffuse manner. Who’s going to pay for that? No one that’s who.
Everyone knows that removing trade barriers and providing stable law and order in third world countries was the policy of that evil regime the British Empire whereas government-managed transfers of money from poor people in rich countries to rich people in poor countries is the policy of that virtuous organisations the UN. Surely experiencing year-on-year declines in GDP over decades was a small price for (almost all) African countries to pay to replace such evil policies by such virtuous ones? Their leaders certainly think so! The OP is fighting the wave of history – or of opportunities for graft, or something.
After writing the above, I understood why appointing Mugabe seemed so natural to his UN sponsors.
Agreed – but reducing barriers to international trade is only part of reducing barriers to trade.
For example the “Labour Codes” that so many countries (especially in Latin America and Southern Europe) are terrible barriers to trade – meaning that vast numbers of people either work illegally (and the “Black Economy” is a dead end there is no road to long term betterment that way, it is just about survival) or are unemployed. Getting rid of the Labour Code (the strangling labour market regulations) would do more to reduce poverty in, for example, Honduras than making more speeches about international trade.
Such things as Occupational Licensing in the United Stages are what keep so many people in poverty, getting rid of such barriers to trade is more important than buying yet more consumption goods with borrowed money from overseas. Contrary to the “Demand” theory no country ever got rich by CONSUMPTION. This does NOT mean that the policy of Free Trade is behind the terrible decline in American society over the last 50 years (as some people INCORRECTLY claim), it is just diversion from the real problems – the growth of domestic regulation, and the wild growth in the WELFARE STATE.
The Welfare State schemes in the United States mostly started in the 1960s (not all of the schemes – but most of them), and they started off small. For example in 1961, when “Food Stamps” started, only a small number of people were reduced to the level of the Ancient Roman Mob dependent on the government for food – now it is tens of millions of people. Ditto Medicare and Medicaid – when they started in 1965 the combined budget was only five billion Dollars, now it is HUNDREDS OF BILLIONS OF DOLLARS.
The crushing weight of domestic regulations and the crushing weight of vast Welfare State spending – these are the real barriers to trade.
Listening to some libertarians one would think it was still the 1930s – when government tariffs on international trade really were the most serious barriers to trade in the world (not now when the real problem is DOMESTIC REGULATION – although, actually, domestic regulation was also a terrible problem in the 1930s). Or 1960 in the United States when the military (which has been in decline for 50 years) really did dominate the Federal budget.
I suspect this goes back to the Victorian Age – when there was little domestic regulation (the governments of France and Germany and America and….. concentrating on regulating international trade) and government budgets really were dominated by defence spending. Classical Liberals got into a habit of denouncing military spending and barriers to international trade – and some (some – not all) Classical Liberals still write as if the problems of 2017 are the same as the problems of, say, 1897. The principles of economics are the same (YES most certainly), but the problems are not the same.
Take the British example – military spending became less important than domestic “Social Reform” spending back when STANLEY BALDWIN was Prime Minister, one would have hoped that people would have noticed after 90 years. And Britain has not followed a policy of Domestic Protectionism for Industry for many decades – to complain of this now (rather than the 1930s) is screaming “fire” during Noah’s flood. One must address the actual problems of one’s own time – not of many decades ago. And the main problems today are domestic Welfare State spending and Domestic Regulation – both in Britain and most other countries. The military is a small item on the budget of most nations (even in the United States it is only about 3% of the economy – dwarfed by the Welfare State) and barriers to international trade are vastly less important than government regulation barriers to DOMESTIC production and trade.
I knew a guy who was offered a position of minister in the cabinet of one of South America’s dictators. He said: “no. I prefer superintendent of customs.”
How will people make a living if you eliminate tariffs?
By operating in licensed trades Jacob – or being part of the vast bureaucracy.
The idea that tariffs are the main problem of Latin America in 2017 is just wrong.
And after we send all our simple jobs overseas, what do we do with the millions of people who are only capable of working simple jobs? The ever expanding welfare state and lower class unemployment is far from the ideal.
They are not all going overseas, it is also due to automation, both of which are great because that means cheaper products. And other jobs will become possible, also due to automation, even for ‘simple people’.
So far, the theory of simple people jobs exists without any evidence at hand. Vast welfare and unemployment roles attest to that. It’s only the people capable of keeping up with the pace of change that are better off, which seemed like a good deal when this all started and is seeming like much less of a good deal now that a substantial fraction of the population cannot find useful or sustaining work.
You seem to confuse correlation with causation. The state taxes things it wants less of and subsidises things it wants more of. So the state pays people not to work (which is effectively what welfare does), well holy crap, it gets less people who want to work.
I know a manager in a fast food chain (who is British) tell me he has not had a British applicant for a job for over two years. Not a single one. Yet a large portion of his customers are low income British people.
That doesn’t actually address what we do with the millions who are only capable of simple work. At the moment we warehouse them on welfare. I have no idea where you imagine these millions of low-IQ, simple mans jobs would come from even if we stopped welfare tomorrow. We’ve enriched foreigners and the middle class by removing the work and sustenance of the lower class. There is a lot of talk about being better off “on average” yet those numbers hide the damage that is being done to the victims.
Tell me Mr Black, if Brits simply will not work in restaurants and yet people from Spain and Poland and France in the UK will, why do you imagine that is? Why do you think building industry has so few Brits but loads of Poles and Irish? Why are all these traditionally ‘working class’ jobs of so little interest to ‘simple’ Brits?
You seem to think jobs are something that ‘we’ allocate (whoever we might be), rather than a consequence of economic activity. Who gets the jobs that spring from economic activity is a matter of ranked preferences that are altered by incentives (many of which are perverse state incentives).
That fact that you misrepresent my point in each reply suggests to me that you don’t actually know what to do either.
1) Then perhaps I don’t understand your point
2) I know exactly what to do, you just don’t seem to see me writing it: stop taxing and regulating jobs out of economic existence, and stop paying people not to work.
Mr Black, there is plenty of that “simple work” all those benighted “millions” are capable of doing; it is now being done by immigrants because those “millions” choose not to do it. To be sure, it’s a rational decision: why do boring, tedious, unpleasant work for low pay if you can live comfortably on welfare? But (assuming, of course, that you actually want those people to pay their own way) all this proves is that the welfare rates are too high. You (collectively) have made the choice to subsidize indolence; you should not be surprised to find that you have more of it.