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September 29, 2004

Brad DeLong Vents on the Anti-Globalisation Crowd.

A couple of points to make about Brad DeLong's estimable destruction of the economically illiterate and self-proclaimed morally superior Seth Stephenson. You really do need to go and read the whole thing as it is a stirring defense of free trade's ability to help the poor.
A couple of things stand out:

Agitate for the expiration-on-time of the Multi Fiber Agreement, which restricts textile exports from the Third World to the United States

Absolutely. The two things that cause the most pain, grief, poverty and death in the world are the MFA and our absurd system (both EU and US) of agricultural subsidy. Simply abolishing both overnight would do more to increase the sum of human happiness than anything else we could do, more than anything that is even conceivable.
Figure out a way to generate alternatives to Mr. Shady Middleman. If there were two or three such bidding for Debbie's business, each would be a lot less shady--and each would pay the mat-makers more.

Well, yes.
Band together with the other guests at Big Luxury Hotel, collect a pool of $10,000 or so, and give it to a committee of senior women in Desperately Poor Village to lend out in small amounts to those in the village who need capital for projects.

Again, well, yes, although perhaps a better idea would be to fund Grameen Bank or some other micro-lender to operate in the area. They do, after all, have the experience and infrastructure to run such things.
Buy the villagers some goats (or whatever other piece of agricultural capital seems useful).

Possibly, although I am of the opinion that more industrialisation, not more agriculture, is the answer. That is what made us rich, after all.
I'm also slightly worried that the Professor's potential methods of alleviating poverty don't include one that we know works, FDI, or foreign direct investment. Nike building a factory there would have greater effects on the poverty level locally than just about anything else. And finally:
Agitate for the United States to increase its foreign aid budget.

No, No, No. As Peter Bauer pointed out, govt to govt foreign aid is "taking money from poor people in rich countries to give it to rich people in poor countries". Build a factory, buy their products, buy them capital goods if you wish, most certainly scrap the rules that destroy their comparative advantages, but not hand-outs, please.
Finally finally, something a little more amusing:
but it is extremely rare in historical perspective for the government to be anything other than a committee for managing (and advancing) the affairs of the local landlord class and the local bourgeoisie.

Indeed sir. If you think through the implication of that phrase we may end up with the first libertarian in the Berkeley faculty.

September 29, 2004 in Economics | Permalink


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Tim Worstall linked up this most excellent article by Brad DeLong that very nicely explains why free trade is the real solution to global poverty, and how the left's quest for "fairness" and distaste for "exploitation" merely propagate what... [Read More]

Tracked on Sep 29, 2004 3:24:22 PM