I think we're going to win

Whenever I find myself worrying that mobs of the uninformed are going to pull down the edifices of our civilization and regress us to a feudal society, I'm going to dig out this video of Bono talking about what works in foreign aid.



Maybe, just maybe, careful study and research can defeat blind emotions. The future looks bright.
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All hail quinoa, slayer of poverty

It looks like the poor farmers in Bolivia and Peru are seeing some decent profits because of growing demand and exports of the food crop quinoa. This has lead to major improvements in the standard of living for poor people in these countries.

Like clockwork, rich busybodies from Western nations feel they have to put a stop to this. As know-nothing foodist Joanna Blythman writes in The Guardian, this increased demand has lead to an increase in the domestic price of quinoa.

The appetite of countries such as ours for this grain has pushed up prices to such an extent that poorer people in Peru and Bolivia, for whom it was once a nourishing staple food, can no longer afford to eat it. Imported junk food is cheaper. In Lima, quinoa now costs more than chicken. Outside the cities, and fuelled by overseas demand, the pressure is on to turn land that once produced a portfolio of diverse crops into quinoa monoculture.

Note the scare word "monoculture." Blythman, who spends a considerable amount of time railing against genetically modified food and other forms of progress, leaves out that rice is still plentiful and costs a fourth of the price of quinoa. It's true that some people in Peru and Bolivia are now eating things like pizza and pasta, but it's not the poor. It's the middle class, and they are eating it because they prefer it and can finally afford it.

Thus, it's clear her biggest problem with quinoa is that it makes poor people wealthy. She would rather live in a world where impoverished serfs toil in the fields all day and sleep on dirt floors than let Bolivian farmers send their kids to school because they might try to bring a cupcake for a snack. Don't mistake her stance as ethical, it's downright cruel.
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Medical journals publishing poor economics

AidWatch has a great post that suggests why the public is so ignorant about the failure rate of well-intentioned foreign aid projects and schemes to eliminate poverty abroad: Medical journals whose reviewers are not competent to detect bogus economic arguments give a pass to sloppy research as long as the medical aspect is competent.

These flawed studies get picked up by the media, who sees they passed the peer-review process, and the public thinks some failed plan makes the world a better place.


The public embraces things like fair trade coffee, play pumps, Tom's Shoes, microloans, the Millennium Villages Project and United Nations Peacekeepers - despite the major failures of these schemes.

The icing on the cake is the things that successfully reduce third-world poverty, like globalization, free trade and sweatshops, have a poor reputation with the public.

You see what I'm up against here?
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So there is a name for that!

I stumbled across a great little vocabulary lesson on Aid Watcher: Aid Fungibility:

Aid Fungibility is when the Donor gives the Government Aid for Good Thing A and refuses to fund Bad Thing B. The clever Government then reduces its own spending on Good Thing A one for one with the aid, so that total spending (Donor + Government) on Good Thing A is unchanged. The government uses its savings on A to spend more on Bad Thing B. So de facto (compared to the pre-aid situation) the Donor really has no effect on A and only has the effect of increasing total spending on Bad Thing B.

Fungibility is why giving homeless people food instead of money simply frees up the dollars they do have for alcohol, if they so choose. It's why a bond issue to make a state university more eco-friendly simply means the school doesn't have to pay for the "green" technology they were going to get and funnels that money into other boondoggles. It's why buying food for a poor nation is really an indirect purchase of AK-47s for the dictator's goons.

I was talking to a relative recently about why her support of casinos that give money to school departments are no different from casinos that give money to SWAT teams, and I failed to explain it as neatly and concisely as William Easterly did, or the World Bank economist who said "It’s when we think we’re financing a power plant, and we’re really financing a brothel."
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Bureaucratic inaction in action

Following the tragic Haitian earthquake, private groups and government aid has been flooding the island nation with the intention of helping, but according to CNN a lot of it is getting bogged down on the way.

"It's terrible," said Eric Klein, head of disaster-relief agency CAN-DO. "There's got to be coordination."

Medical aid is particularly needed, Klein and others said.

"There are medical supplies just sitting at the frigging airport," Klein said while sitting in the cab of a 1,200-gallon water truck near the heavily damaged presidential palace.

Klein appears to be of the belief that coordination of such a large effort can be accomplished by using competent, trustworthy people in a top-down approach. However, another quote from the article is a little more revealing to the problem.

The Geneva, Switzerland-based Doctors Without Borders complained this weekend that U.S. air traffic controllers in charge of the Aeroport International Toussaint Louverture were diverting aircraft carrying medical supplies and other humanitarian aid. U.S. military flights were getting top priority, the doctors group said.

It appears we do have people in charge, and they are not placing value on the same things the activists are.

There are different categories of aid volunteers. Haiti needs people who can give medical attention to the sick, rescue people from debris, provide security from violent opportunists, distribute meals, rebuild houses and many less publicized tasks. All of these specialists are important to the relief effort, but as Friedrich Hayek wrote in the Road To Serfdom

"The illusion of the specialist that in a planned society he would secure more attention to the objectives for which he cares most is a more general phenomenon than the term specialist at first suggests... we all think that our personal order of values is not merely personal but that in a free discussion among rational people we would convince the others that ours is the right one."

It's normal for the medical volunteer to think that medical aid is more important than hunger aid, or for the security enforcer to believe more harm will come from unrestrained anarchy than lack of proper housing. All of these specialists are part of the solution, but the best way to fit them together is a puzzle too difficult for one person or committee.

Who can really say that feeding 100 people is more important than healing three, or protecting four businesses from looters for a week is more important than repairing the roof on one house? A central planner has to place a value on all these things, and its impossible to value them in a way everyone will agree upon.

One alternative to a centrally-planned system is a market system. Doctors Without Borders would be able to bid on runway time at the airport. The group may not be able to outbid the US military, but it could outbid a construction company.

That does mean some groups with more capital will be able to push their way around, but is that any different than what they are doing in the political process right now? Groups have to both possess capital and be willing to give it up for what its members believe has value.

How chaotic would such a system be? About as chaotic as the lines at a supermarket. Both are examples of "spontaneous order," where each player uses his own knowledge to act in a limited realm. When each supermarket shopper looks for the shortest line, all lines end up roughly equal and everything runs smoothly and peacefully.

Instead of a self-organizing system that uses the knowledge each individual player has, the Haitian recovering is bogged down with a centrally-planned system that is desperately trying to organize a flood of aid from all over the world with a limited supply of information. That is why there are crates of medical supplies sitting idle at the airport and volunteers stranded without transportation. It's not incompetent people in charge, it's reliance on an overloaded system that couldn't possibly coordinate this many parts.

This isn't merely hypothetical. Wal-Mart responded to help the victims of Hurricane Katrina faster than FEMA did. Partially that was motivated by good will, and partially for the PR, but for the people being helped, the motivation didn't matter.

U.S. Represenative Alan Grayson isn't a fan of anyone who criticizes the Haitian reconstruction effort or the government in charge of it:

"Rush Limbaugh, if you want to say one good thing about him, at least he's consistent. Maybe he thinks all those people who are trapped under the rubble in Haiti are going to be freed by the invisible hand of the free market."

Perhaps Rush Limbaugh didn't say that, but I am. While the invisible hand won't personally pluck heavy objects out of the way, it will allow aid groups to respond much faster and smarter than a centrally-planned system would.

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