Keith, Baur is right and thanks for posting it. Actually freebies will never take the place of trade - letting people earn their own living. Particularly as little of the welfare money sent reaches the people.
My favorite example I have reported before - the $60 million given to Nigeria that unaccountably disappeared. No-one knows what happens to it. Nigeria is a modern African state, awash with oil. One wonders why any money at all was going in her direction - but we know $60 million didn't reach anyone who needed it.. Now, while economics is not complicated, politics is definitely so. Trouble is politics is so mixed up in what passes these days for economics that it's difficult to separate them. I would suggest, Keith, that when you view economics from a national or global perspective, you are actually talking politics. Economics has never been anything more than people making things and exchanging them. If you multiply an exchange between two people by 3 billion similar exchanges, have them take place several times a day every day of the year, it has not become more complicated. It's just a lot of exchanges between groups of two people. Further, each exchanger (except for errors of judgement) is better off after the exchange - or he wouldn't exchange. Trade is part of that beloved "win-win" scenario. But, while economics is easy, politics is a mess. We all know the "Law of Unintended Consequences". As political control of public activities becomes even more intrusive, so will this "Law" become more significant. Particularly as p0liticians are unwilling to get rid of laws. They prefer to pass more laws that mend the previous absurdities - often finding themselves in the middle of the "Law". In California, we've had as many as 1,400 laws passed in 12 months. This in addition to Federal laws and local laws. Would it not be remarkable for these laws never to conflict with each other? Never to cause more trouble than they are worth? (Of course if such conflict becomes noticeable, there is a way of handling it. Pass another law.) Another way to complicate things is for politicians to pour money into a project. Such things develop a life of their own and grow, swallowing money and people until they become a virtual fixture with few wondering exactly what they are doing. The AIDS campaign is such a project - as is Global Warming. Such international organizations as the IMF, the WTO, and the assembly of groups operating to control "Over-Population" are in the same group. Maybe the AIDS and Over-Population groups are working to cross purposes? In any event, as one might expect, these political/scientific "complexes" are soon engaged in maintaining the operation, rather than solving the problem. Far be it for me to express skepticism, but let's say someone came up with an AIDS Magic Bullet, what would happen to the giant operations now in existence? More than $92 billion has so far been spent on AIDS, yet not one person has been cured, nor has a Magic Bullet been found. Other than AZT which is lethal drug, not much seems to be happening. (Four times as much is being spent on AZT research as all other potential treatments put together.) Meantime Burroughs Welcome has been cashing in on this rather less than miracle drug. It costs the National Health Service about $6,750 a year to treat an AIDS patient, Americans must pay $10,000 a year for the same treatment. And it does little more than kill the patient. Yet, huge amounts of Wellcome money have been ploughed in to keeping AZT profits coming. Let's call it the political/industrial/scientific complex. As I've said, these political projects seem impossible to stop. Probably, to quote Bauer, "so many of them on the gravy train of aid". And so it goes! Harry ______________________________________________ Keith wrote: >In the following transcript, Pieter (Lord) Bauer (sometime Prof at London >School of Economics, recently deceased) is in conversation with John Blundell. > >The issue of government aid to Third World countries is rather similar to >the practice of welfare payments within developed countries -- although the >poor benefit to some extent, the welfare state is also a superb method for >creating and maintaining large numbers of middle class jobs and the >subsidising of middle class families. > >The latest Family Credits brought into existence last week by the Labour >Government will subsidise families from the poorest in the land right up to >families with incomes of US$100,000 (one hundred thousand) per annum. It is >not automatic, however, and needs personal application -- requiring a close >study of a booklet of 47 pages of small print. Considering that >substantially more than half of the genuinely poor cannot read at all (one >definition of this is: cannot find the word "plumber" in the yellow pages) >then there's obviously going to be a delay before all the deserving >actually understand Family Credits and fill in their application forms. > >Anyway, back to international welfare: > ><<<< >JB: In the "Oxford Dictionary of Political Quotations" you are credited >with saying: 'Aid is a process by which the poor in rich countries >subsidise the rich in poor countries.' Amplify that a little. > >PB: When people talk about aid, they only mean governemnt-to-government >subsidies. aid doesn't go to the miserable people you see on your >television screen. It goes to the rulers. And the rulers tend to be the >most prosperous people in their countries. That is what I meant. > >JB: Is money going from the poor taxpayer in rich countries through our >government . . . > >PB: . . . . to the other government, whose personnel tends to be well off, >relative to the rest of the population. > >JB: So it sounds as if you feel auid can't do all that much to help these >countries develop. > >PB: Certainly. If you want to talk in semi-technical language, the most aid >can do, at best, is slightly reduce the cost of borrowing of those >countries -- which they're able to do, very heavily. > >JB: So the very best best scenario is it is a slight help. But I would also >take it that it is a major hindrance. > >PB: Yes. It contributes to, and promotes the politicisation of oie in these >countries. and that, in turn, intensifies the political struggle and >diverts people's attention from productive economic activity to political >life. > >. . . . > >JB: When you first began to publish these ideas, to talk about these ideas, >how were they received? > >PB: I'll give you an unambiguous answer -- badly! > >JB: By everybody, by your fellow academics, by the public? > >PB: No, by my fellow academics, because there were Oh, so many of them on >the gravy train of aid. But from the public at large, I had quite >substantial fan mail. The theme was generally: "Thank you for helping me to >keep my sanity". > >JB: So it was members of the public who had come to similar conclusions >themselves? > >PB: Yes, but did not know how to formulate them. I formulated them for them. > >>>> > >Keith Hduson ****************************** Harry Pollard Henry George School of LA Box 655 Tujunga CA 91042 [EMAIL PROTECTED] Tel: (818) 352-4141 Fax: (818) 353-2242 *******************************
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