Giving It Away

Reading Peter Singer’s new book I was reminded of the old saw: “Give a man a fire and you will keep him warm once; set a man on fire and you will keep him warm for life.”

Professor Singer’s prescription for solving world poverty is breathtaking for its simplicity, and for other things: basically, we should give our money away to the poor. Let us, he says, give up our champagne, caviar and yachts so we can donate the money to Nigeria or somewhere (the fact this would leave the grape-growers, vineyard-workers, fishermen, shelf-stackers of the caviar jars, yacht-builders without money to donate is not dwelt upon). Coming from someone who has argued elsewhere that defective infants may ethically be killed if their parents decide that they would like them replaced, this moral hectoring tends a little towards the comic. Actually, the last time I read of champagne and caviar being ordered in vast quantities was by Robert Mugabe to celebrate his eighty-fifth birthday as his country starved and rotted. Ask him to give it up, perhaps?

Nor is it just a matter of the yacht-owning classes. If we drink bottled water or soft-drink instead of tap water we are proving that we have money to give away. The less economic activity we have the better we will be able to help others? Is it too much to hope that Professor Singer will now be campaigning against the present horrifying flight by world leaders back into pseudo-Keynesian demand “stimulation”?

Obviously there is a valid point somewhere here, if not a particularly original one: it is morally incumbent upon us all to help the poor. Apart from the late Ayn Rand, most of us know this anyway: practically all great religions command it. The USA and Australia rightly sent massive amounts of disaster relief after the Boxing Day tsunami while the United Nations conferred and embezzled. But if giving money away solved poverty, then Africa, which has received astronomical amounts of aid in the last half-century and more, would have no problems. In fact far from advancing with aid, African countries have in many cases regressed. Singer shows little knowledge of the well-known work of developmental economists like Peter Bauer, who argues compellingly that aid has, among other things, meant African dictators have no motive to develop their own economies since they have no need for a tax-base, and tends to be a case of the poor in rich countries subsidising the rich in poor countries.

The counter-productive effects of much aid (apart from when it is used on a local and temporary basis for such things as disaster relief), particularly government-to-government transfers, have been documented to the point of being beyond question by competent professionals.

Philip Booth, Editorial and Programme Director of the Institute of Economic Affairs and Professor of Insurance and Risk Management at the Sir John Cass Business School, has written that it is hard to find any positive relationship between aid and growth—indeed, there appears to be a negative relationship. After the late 1970s, aid to Africa grew rapidly yet GDP growth collapsed and was close to zero or negative for over a decade from 1984. GDP growth in Africa did not start to pick up again until aid fell in the 1990s. In East Asia, South Asia and the Pacific, one found a similar trend. Booth quotes Fredrik Erixon’s Aid and Development: Will It Work This Time? published by the International Policy Network in 2005, which cites a number of detailed country studies that find no benefit from aid whatsoever, across a range of periods and a large number of countries. In total, in the thirty years from 1970 to 2000 Africa received $400 billion of aid, under different regimes, tied to different forms of economic policy and reform, yet there was no evidence of a single country developing because of aid.

The Economist wrote on January 17, 2004, that for every dollar that northerners lent Africa between 1970 and 1996, eighty cents flowed out as capital flight in the same year, typically into Swiss bank accounts or to buy mansions on the Cote d’Azur.

African economists are well aware of this. Dr George Ayittey, President of the Free Africa Foundation, has said: “Africa doesn’t need aid … its begging bowl leaks horribly.” Aid was attacked in the strongest terms by the Kenyan economist James Shikwati when interviewed by Der Spiegel on July 4, 2005. Note that he does not differentiate between government and non-government aid:

Spiegel: Mr Shikwati, the G8 summit at Gleneagles is about to beef up the development aid for Africa—

Shikwati: For God’s sake, please just stop.

Spiegel: Stop? The industrialised nations of the West want to eliminate hunger and poverty.

Shikwati: Such intentions have been damaging our continent for the past forty years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor.

Spiegel: Do you have an explanation for this paradox?

Shikwati: Huge bureaucracies are financed [with the aid money], corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need …

Oxford-trained Zambian economist Dambisa Moyo has recently published a book, Dead Aid: Why Aid Is Not Working and How There is a Better Way for Africa, advocating that all government aid to Africa be cut off within five years. She argues that it is making effective pro-market and pro-development measures impossible.

Aid has helped finance the endemic wars of Africa and has often subsidised re-primitivisation. This is especially so, it appears, with large-scale government-to-government transfers and some heavily-bureaucratised and politicised non-government agencies. Some initiatives, particularly private religious and charitable ones, have had much more positive results, but generally when carried out in a limited, localised and case-by-case manner.

Singer says some critics of aid do not pay sufficient attention to non-government aid organisations such as “CARE, Oxfam, Save the Children and World Vision”. I will try to partially rectify that forthwith: Australian World Vision Chief Tim Costello has attacked Miss Paris Hilton for having recently spent about $5000 on clothes during a visit to Sydney. Speaking truth to power, he stated roundly that: “In World Vision terms, $5000 would ensure that a village of 2000 people in Africa or Asia would have clean water for the rest of their lives.” According to a recent article in Business Day Mr Costello’s salary is in excess of $250,000 per year. I think it was Tim Blair who said of this: “Do the maths.”

Singer does acknowledge that the micro-loans pioneered by Muhammad Yunus and the Grameen Bank since 1976 have helped some of the poorest in Asia break the grip of usurious moneylenders and work their way out of absolute poverty. However, this was not a matter of “aid” but of enlightened economic good sense.

Much of Asia has developed rapidly not through aid but through efficient work and appropriate public policies, although obviously Taiwan, largely comprised of people who had fled to a small resource-poor island, and war-flattened South Korea, needed aid initially. Europe after the Second World War needed the Marshall Plan but without other factors it would not have rapidly regained affluence. Even the fact that some Asian societies like Indonesia have been notoriously corrupt has not prevented development.

Things in the real world are complex. The great real benefactors of humanity—apart from medical and scientific pioneers like Lister, Florey, Banting and Salk, the agricultural scientist Norman E. Borlaug, and various heroic and saintly figures, many of whom subscribed to ethics which Singer has elsewhere repudiated and attacked—have included inventors like James Watt and George Stephenson, who made steam-engines practical, probably largely in order to make money for themselves. Few in the last thousand years have contributed more to human well-being than Adam Smith, but he did not do it by giving his money away.

Often these benefactors have been wealthy hobbyists working at least largely for their own pleasure. Sir George Cayley developed self-righting lifeboats. King George III—a greater builder of the modern world and greater benefactor of humanity than any number of radical political theorists—helped agricultural science and astronomy out of his own funds and helped pay for Captain Cook’s voyages. The great inventions which have transformed life for the better, from lenses to flush toilets, arose from a complex of religious, social, cultural and economic factors. Werner von Braun built V2 rockets to enable Hitler to bombard London, and thus helped pave the way for weather satellites, saving incomparably more lives than any private philanthropist. Forcing lending institutions to give cheap mortgages to the poor in America—which we must guess was at least partially motivated by good intentions—has resulted in catastrophe.

Singer does say there is an argument by “some aid critics” that the best way to help the poor of the Third World is by removing trade barriers and European agricultural subsidies, and we should be campaigning to this end. However, he claims this is politically difficult. So should we do something that doesn’t work because it is easier than something that does? Yet matters of mere impracticality do not seem a bar to certain of his other nostrums. (Actually, there has been an enormous and beneficial reduction in international trade barriers since the Second World War as a result of persistent efforts and despite some setbacks.)

My own suggestion is that the best way of helping the poor of Africa would be to use moral and other pressure on the countries of Europe, particularly France and in spite of France’s powerful and selfish farming lobby, to open their borders to African agricultural products. As America has shown recently, large and sophisticated nations can be pressured into at least temporary paroxysms of idealism and in this case such an episode might be used for positive ends.

Singer continues: “Because it isn’t tried, no one really knows whether poverty on a global scale can be overcome by a truly substantial amount of aid provided without political interference.” Well, no. Countries are governed by things called governments, and for good or bad reasons governments like to see how large amounts of money going into their countries end up. As a way of robbing their own sick and dying, some African countries charge large import duties for medical drugs, donated or not, without even the bad excuse that they have any competing drug industries of their own which might need protection. Does Mr Singer want those governments overthrown? By him and whose army?

Singer also claims that giving aid, regardless of where it ends up, makes the donor feel good: “wise people have said that doing good brings fulfilment … A survey … found that those who gave to charity were 43% more likely to say they were ‘very happy’ about their lives than those who did not give … The American Red Cross [says] ‘Helping others feels good and helps you feel good about yourself’.” But isn’t there something a little wrong here? Charity reduced to another form of selfishness? Another reviewer of this book, Joseph Lawler, has said:

Singer claims that for Christians, “sharing our surplus wealth with the poor is not a matter of charity, but of our duty and their rights.” Here Singer gets it backward. Christians believe that every human being has a God-granted right to life and dignity, but the motivation for aiding the poor transcends the ideas of duty and rights. For Christians, charity means love. The recognition of another’s dignity as a human prompts acts of charity or love … for Singer, tragically, charity is reduced to one person maximizing his utility by sending money to a charity organisation without thinking too hard about how it benefits an actual human.

And Christians sharing “our” wealth? Is that “we” Christians? This seems a little at odds with Singer’s somewhat, er, controversial interpretations of Christian ethics in some of his other writings.

Also we evidently need more spying on how we all spend our money: “We need an ethical culture that takes account of the consequences of what each of us [emphasis added] does for the world in which we are living, and judges accordingly.” However, a little question of who judges the judges has been hanging around annoyingly for a couple of thousand years. One sub-chapter is headed “Judging the Rich”, but again there are problems in judging the rich, as with judging “each of us”. As Gandalf put it in The Lord of the Rings, even the wise cannot foresee all ends. We have Nobel Prizes because Alfred Nobel made a fortune from dynamite. Hitler may have been denied a victory parade up the Strand partly because in 1931 the rich and patriotic former chorus-girl Lucy, Lady Houston, was able to give the then enormous donation of £100,000 to encourage British air-racing. It led to an aircraft which the director of Vickers-Armstrong named to commemorate his little spitfire daughter.

Climate change is mentioned as condemning “those who own large private yachts” (large private yachts seem a bit of a King Charles’s Head with Professor Singer. No doubt his own frequent international peregrinations by jet aircraft contrive to be completely benign).

Professor Singer’s main prescriptions are largely divided between wishing for the impractical and persisting with policies which have failed over decades. The main fault of the book is its tendency to deal with complex problems in a simplistic manner.

There are a few good parts in this egg, such as his recounting of the Grameen Bank’s work, which he makes quite inspiring, but the curate has to look hard for them. Lord Bauer’s 1981 book Equality, the Third World and Economic Delusion (not mentioned by Singer) probably remains the best word on the subject.