"Charity Doesn't Solve Anything"

As you know, Bill and Warren have set out on an excellent adventure.

Bill Gates and Warren Buffett have been traveling around America and the world trying to persuade their fellow billionaires to join them in pledging half of their assets to charity.

Now you know that Bill and Warren are very generous people. They will not merely be remembered as obscenely rich, but as paragons, as paladins, as champions of progressive causes, as men of unimpeachable moral standing.

If we are not feeling quite so charitable ourselves, we would note that we are witnessing the spectacle of two men who are so rich that they can burn money. It does not really matter how much they burn.

After all Bill himself lives in the Pacific Northwest. Maybe he is just reviving the old Native American custom of potlatch.

Half of an infinite amount of money is still an infinite amount of money. Bill and Warren can burn half of it and still, if they wish, ensure that their descendants will always be richer than everyone else.

If they have decided not to make their children and grandchildren absurdly rich, because they understand that living off of trust funds does not promote human initiative, self-reliance and self-respect, then why would they want the same rules to apply to non-family members?

For all I know, Bill and Warren are just avoiding taxes. They do not trust the government, and want to have a say in how their money is spent.

Ironically, both Bill and Warren tend to favor high taxes. When you are a billionaire you do not effectively pay taxes, so no matter what your tax rate your lifestyle does not suffer.

The best irony here is that while Bill and Warren are off on their grand adventure, Bill, Sr. father of the Microsoft billionaire, is promoting an initiative in Washington State to raise state taxes on wealthy people.

Is this part of the Gates philanthropy business? To make sure that others give more money to the government, the better to make up for the money that the Gates family is sheltering from taxation.

Unfortunately, it is also public policy. As Arthur Laffer pointed out, state income taxes tend to stifle economic growth. Maybe, having gobs of money blinds you to reality. Link here.

All things considered Bill and Warren’s excellent adventure looks like a self- promotional junket by people who have too much time and money on their hands.

Yesterday, the world’s richest man, Carlos Slim, answered Bill and Warren's initiative. Slim responded: “Charity never solved anything.” Link here.

Slim continued: "'The only way to fight poverty is with employment,' he said. 'Trillions of dollars have been given to charity in the last 50 years, and they don’t solve anything.'"

Charities do create employment, mostly for administrators and for do-gooders. But they do not create the kind of economic activity that sustains a prosperous society, and allows people to arrive at a point where they do not need charity.

The point is very obvious. It has been repeated over and over again. Apparently it has made no impression on Bill and Warren. As the Journal reports, Slim’s: "… point seems to be that society would benefit more if the wealthy channeled their creative energies and talents toward building job-creating businesses rather than doling out cash."

Here’s an idea. What if Bill and Warren dedicated ten percent of their fortune to providing seed money for new businesses in poorer American neighborhoods. What if they set up cooperatives that would train and help prospective entrepreneurs run these new businesses?

Human societies have always had charities. After all, religions have been on the front lines of charity as long as they have existed.  Christian love is called agape in Greek, caritas in Latin, and charity in English.

When the New Testament says that you should love your neighbor as yourself, it uses the word: agape.

But how much of the money that Bill and Warren and their friends are going to be funneling into charity is going to be given to religious organizations? How much of it do you think will go to Catholic charities or Hadassah or the United Methodist Committee on Relief?

Don’t hold your breath.

Bill Gates wants to cure malaria. It is certainly a worthy goal. Of course, you would think that given the prevalence of malaria, pharmaceutical companies have plenty of incentive to find a cure.

I will guarantee, without even looking it up, that the Bill and Melinda Gates foundation is not involved with research that would produce new pesticides that could kill the mosquitoes that transmit malaria. Progressive values would preclude such funding.

Carlos Slim was pointing to the simple fact that if you send boatloads of food to feed the world’s hungry, you are going to feel very good about yourself, but you are also going to destroy local agriculture.

No one can compete with “free.”

Gratifying your philanthropic urges can easily create a cycle of dependence, one that saps initiative, self-respect, and demeans individuals.

Keep in mind, no matter who begins these foundations, and no matter whose name is on the door, ultimately they will be run by people who are in the business of philanthropy, and that means, people who have made it their life’s work.

These people are not champions of the free market; they are not especially interested in building businesses. They are interested in assuaging guilt, their own or someone else’s, by giving away money.

These charities will be promoting liberal and progressive causes; they will become advocacy organizations. They will not be promoting capitalism.

It is a good thing to fund education. It makes you feel good to fund education. Except that the problem with education has very little to do with money.

Education is a system that has been run by liberals and progressives, with precious little interference from moderates and conservatives. More and more it has devoted itself to inculcating the values associated with political correctness and self-esteemism, rather than teaching children.

All the world’s money is not going to change that.

It’s one thing to give money to the poor and the indigent. Religions have always done as much. It’s quite another to create a special class of people who can promote their own ideology under cover of philanthropy.

And who are not answerable to market forces or even to God.

Charity Has Still Never Solved Anything

You may recall, or you may not want to recall, my comments on Carlos Slim’s response to Bill Gates and Warren Buffett. Link here.

When Gates and Buffett challenged the world’s billionaires to give half their money to charity, Carlos Slim responded that charity never solved anything.

Slim was saying that free market capitalism was by far the best way to help underdeveloped countries to overcome poverty.

He was not saying that it was all that was needed, but he was saying that it was the primary thing. When all is said and done, charities rarely create very many jobs. They are not engines of economic development and prosperity.

However well-intentioned their donors, and however much charities commit to scientific research, they tend to support leftist causes and leftist solutions to problems.

Whatever their founders intended, charities tend to fall into the control of people who hold progressive beliefs. Those who make careers out of giving away money rarely understand the entrepreneurial spirit. They distrust markets and prefer to believe that they can make better decisions than those who receive their largesse.

Some people find the issue difficult to understand. And that does not just include commenters on the blog. According to John Dizard many savvy investors are missing the story of the economic progress happening today in Africa. Dizard explained the issues in his Financial Times column on poverty in Africa. Link here.

First, he addresses the question of what charities have done to help Africans overcome poverty. Dizard answers: “I grew up surrounded by international do-gooders. Much of the foreign aid they advocated came in the form of free food imports (that impoverished local farmers) or consulting contracts (that paid for their graduate theses).”

Then he adds: “In Africa, neither Soviet, nor American and European foreign aid transformed the continent. Instead, the aid tended to inflate the parasitic elements of the post-colonial state structures. When that created internal conflicts, the secret services of all sides got involved, with miserable results. To the degree the leaders’ money came from foreigners, they had less reason to pay attention to the needs of the public. Development handed down from above did not work.”

Like it or not, good intentions do not make for economic progress. Nor do top/down management directives.

As it happens economic progress is coming to Africa today. But it is not coming from charities. It has been spurred, in part, by Chinese investment in commodities.   

Giving away food might make you feel better than going into Africa and buying up mineral resources and creating industries to make use of those resources, but the latter produces and spurs far more economic activity than the former.

As Dizard writes: “What is working now, and what is creating a sustainable expansion of investable African opportunities, is growth from below. Yes, Africa is a commodity exporting continent, and it is earning much more from exports of metals, oil, and agricultural commodities.”

But that is not the whole story. It is not, Dizard says, just a “China story.” The economic activity that has been stimulated by the commodity boom has provoked an entrepreneurial spirit among Africans. Especially among those who have gotten over the idea that they would be saved by charity from abroad.

So, “32% of the continent’s GDP growth between 2000 and 2008” is attributable to income from natural resources. But that is only part of the story. The rest, Dizard explains, “came from growth of internal sectors, including transport, telecommunications, more efficient wholesale and retail, and manufacturing.”

Investment in natural resources provided the impetus to economic growth and development. This does not mean that charity has no place. It simply places the correct emphasis on what really does  solve problems.

Who Should We Care For?

Why do we care about people half-way around the world? Why do we feel that we have a moral duty to pick them up when they are downtrodden and to shower them with our largesse?

Why do we seem to care more for poor people in foreign countries than we do for our impoverished neighbors?

It seems so natural to care for those who are wretched, regardless of where they live that we lose sight of a fundamental point about caring.

Happily, John Derbyshire reminds us of it in a review of David Stove’s book: What’s Wrong With Benevolence.

The normal and natural condition for humans, Derbyshire explains, is to care for those who are closest to us, who rely most directly on us, who live in the same neighborhood or city or country.

In principle, you ought to care most about your family, because they depend on you directly, and then on your friends and neighbors, because they depend on you indirectly.

But, if you care for your family, and even your friends, your gesture does not count as charity. They count as a moral obligation. Apparently, true charity only occurs when you do not have to do it, and when you expect no return. When you are contributing to a relief effort in a foreign country, you are, effectively, giving charity. You do not have to, and you expect no real return.

Derbyshire raises the issue, and I second him on this, because there are people among us who care less for those near and dear to them than they do for those who are far away and anonymous.

It may be that they feel so completely alienated from family and friends, even from the local community, that they only way they can care is to bestow favors on people they do not know. But still, to care for someone who does not know you exists, or does not much care whether or not you exist, feels strange.

In principle, you can care for your family and care for poor people in Indonesia at the same time. Especially, if care is merely financial. You certainly can't spend time caring for your family and spend time caring for the poor people of Indonesia at the same time.

And yet, it does happen that people whose sense of moral self-worth derives from their ability to care for people who do not care about them deprive those who are close to them of their care.

They are much more dedicated to saving the world or the whales or disadvantaged than they are to helping their children finish a homework assignment or to attend the school play.

Derbyshire offers the fine example of Mrs. Jellyby, from Charles Dickens’ Bleak House.  She cares so much about African tribes that she neglects her own family.

Dickens described her: “It struck me that if Mrs. Jellyby had discharged her own natural duties and obligations before she swept the horizon with a telescope in search of others, she would have taken the best precautions against becoming absurd…”

Derbyshire follows David Stove in placing this all under the rubric of benevolence. To me they are talking about charity more than benevolence.

When you give charity you expect no return. When you are benevolent, you might invest in a nation, build an industry, and give local citizens a chance to work at it. You do expect a return on your investment, but that does not prevent your gesture from being benevolent. If you want to see people overcome poverty and unemployment, and you expect to benefit from the task, you are, effectively more benevolent than the charitable giver who sends a check or some goods and then forgets about the rest.

As I have said before, with Carlos Slim, charity does not alleviate poverty. Summarizing the views of Thomas Malthus, Derbyshire explains: “The truths which Malthus vainly strove to impart cannot be too often repeated. These are that widespread poverty cannot be relieved from the outside and, therefore, can be relieved (if at all) only by the industry, self-reliance, and prudence of the poor themselves. But the worldwide triumph of Enlightened benevolence has been at the expense of precisely these traits of character. … “

Whether this derives from the Enlightenment or some more esoteric source, the emphasis on charity tends to see the world in terms of a human universal. It tends to downgrade and downplay the notion that we owe our primary loyalty to our family and our nation, that is, to those who depend most directly on us.

It’s one thing to say that we should help people who have been harmed by a natural disaster. It is quite another to say that our charity can and should eradicate world hunger and poverty. The first is a singular event, an act of God. The second is an act of man, a place where our charity is less likely to produce the desired end.

The first involves sending in temporary logistical support. The second requires a sustained effort, one that engages the work of the local population.

As Derbyshire underscores, when you merely send in charity, you are telling the recipients of your largesse that you believe them to be incapable of doing it themselves.

If they are the victims of a tsunami, there is no shame involved in being unable to mount the kind of logistical effort that would be required to keep them alive. If they are merely impoverished, your efforts to enhance their living standard by giving them charity will demoralize them and rob them of their own initiative.

When charity is defined in terms of alleviating poverty, it counts more as a grandiose gesture whose primary beneficiary is the one who is giving it.

We consider ourselves a benevolent people, a generous people, and, above all else, a rich people. If you give away vast sums of money you are announcing to the world that you have far more money than you could ever use.

Wealthy nations often feel obliged to give charity to less fortunate or less successful nations. But not all wealthy countries are similarly inclined to redistribute their wealth. Some of them do not believe that charity solves problems.

If Derbyshire and Stove are correct here, this suggests that these countries believe that charity begins at home. And that we owe more to those who are near and dear to us than we do to those who are far away. The notion that we owe more to those who do not belong to our community seems to derive from the notion that nations and local communities have been or should be superseded by our loyalty to the human race.

Charity in Haiti

You may recall, or better, you may not want to recall Carlos Slim’s statement: “Charity never solved anything.”

I found it so touching, and so compelling that I posted about it a couple of times already. Link here.

Still, it can easily lend itself to misinterpretation. It sounds like it reflects a very cold heart indeed.

In fact, it states that if you really want to solve long term problems in underdeveloped countries, industry and trade do a better job than handouts.

Today Nicholas Kristof offered an excellent illustration of the point, by taking the full measure of what charitable giving has accomplished in Haiti. Link here. As you know, no one has ever accused Kristof of being cold-hearted.

In his words: “Private and public donations saved lives in Haiti, no question. But it’s also true that well-meaning bleeding-hearts tend to exaggerate the impact aid typically has on a country. Those nations that have managed to lift themselves out of poverty have done so mostly with trade, not aid — with giving people jobs and a ladder, not handouts and an elevator.”

He concludes: “ What Haiti needs above all these days is these kinds of livelihoods for its people, not just shipments of food and clothing. It’s hard to think of a charitable project that will be as beneficial as the Coca-Cola Company’s decision to build up the mango juice industry in Haiti, supporting 25,000 farmers. The same is true of the move by South Korean garment companies to open factories in Haiti.

“I strongly believe that we have a moral obligation to address extreme poverty around the world. But sometimes the best way to discharge that obligation isn’t charity in the old-fashioned sense of handouts, but rather helping people like Ms. Jean find their own ways to support their families.”

Capitalism and free trade, not charity... that's the solution.

U2 Concert Disrupted by Protest and Violence

There they were on stage, in concert at Glastonbury, England.

And then, all of a sudden, U2’s performance was disrupted by a protest group called Art Uncut.

The Sydney Morning Herald described the scene: “The anti-capitalist group Art Uncut inflated a 6-metre balloon emblazoned with the message "U Pay Your Tax 2." Security guards wrestled them to the ground before deflating the balloon and taking it away. About 30 people were involved in the angry clash.”  Via Instapundit.

So, rich sanctimonious liberals, even noted anti-poverty crusaders like Bono and his band do whatever they can to avoid paying taxes.

Somehow or other, the liberal voices who rail against hypocrisy when some conservative is caught in flagrante delicto are silent when it comes to the hypocrisy of anti-poverty advocates not paying their fair share of taxes.

In Ireland, from whence they hail, U2 are folk heroes. At least they were until recently. As you know, Ireland has recently run into a serious spot of financial trouble, which has involved severe economic austerity.

People then noticed that the greatest Irish rock band, whose members count among the wealthiest Irishman on the planet, had been dodging its taxes.

Not that they did anything illegal. U2 moved its corporate base from Ireland to the Netherlands, where taxes on royalties are next to nill.

Of course, U2 is hardly alone. President Obama’s favorite corporation, General Electric, paid no taxes last year either.

And then we see the great humanitarian billionaires, Warren Buffett and Bill Gates, who are, legally, sheltering their vast fortunes from taxes by giving it away to the Gates foundation.

One might ask how much of the foundation’s massive philanthropic activity takes place in America and how much of it takes place around the world.

And one might ask whether all that money would not be put to better use if it was invested in new business. As Carlos Slim famously noted: “Charity never solved anything.”

Unless you want to count charity’s ability to salve the guilt of the liberal conscience.

So, we are treated to the spectacle of watching sanctimonious liberals like Buffett rail against the inequities of the tax code while sheltering their fortunes from taxes.

It brings to mind the great statement from billionaire Leona Helmsley: “We don’t pay taxes. Only the little people pay taxes.”

The Downside of Charity

In previous posts I supported Carlos Slim’s idea that: “charity never solved anything.”

I even had the temerity to challenge the basic concept of the Bill Gates and Warren Buffet charity challenge.

Aside from the negative tax consequences for the U.S. Treasury, throwing that much money into the charity world will almost certainly lead to political advocacy, especially for leftist causes.

I even expressed some suspicions about the Gates Foundations signature effort to try to find a cure for malaria, not so much because I am well versed in the topic, but because I wanted to open a dialogue where we can weigh the  good feeling that produces all of this charity against the real consequences experienced by its intended recipients.

Just because your heart is in the right place, and just because  you fervently desire to do good, that does not mean that your efforts are going to be positive, constructive, or beneficial.

As it happened, one or two commenters on the blog were kind enough to point out that I did not know very much about malaria.

The point was well taken.

But it is hardly the end of the story.

Today, I read an article in the Harvard Business Review by Ro and Bill Wyman. The Wymans have dedicated themselves to improving the health care system in Africa. Link here.

They explain that targeting a “niche” disease-- like malaria or AIDS-- as many charitable foundations do, is not necessarily the best way to bring better health care to Africa.

Ro and Bill Wyman write: “Despite the large doses of health aid that humanitarian organizations have poured into Africa, many Africans are still living with — and dying of — a lack of basic healthcare. Why? Primarily because most aid is niche aid.”

They add: “In the sub-Saharan region, pneumonia and diarrhea kill nearly two million children under five each year — pneumonia alone kills more than AIDS, malaria, and measles combined — yet less than 20% of children with pneumonia receive the antibiotics that could cure them. And most maternal deaths are preventable with access to reproductive health services, equipment, supplies, and skilled healthcare workers.”

And finally: “Instead of pouring millions of dollars into disease-centric programs, international aid organizations should be working with African stakeholders to build a community-level primary care delivery system, which can prevent and treat the deadly, everyday illnesses as well as administer complex disease protocols more reliably.”

For those who are interested in these questions, I recommend their article.

Was Mao Zedong a Feminist?

One accepts, because one is very open minded, that the New York Times has promoted itself as a leader of the Resistance against President Donald Trump. Nothing quite like striking a blow for democracy by extolling a disloyal opposition. One also accepts that the Times has profited for propagandizing its coverage of the Trump administration. In monetary terms Trump is the best thing that happened to the Times since Carlos Slim bailed it out.

And yet, how to explain that the newspaper could be so brain dead that it has taken to rationalizing Communism. One of the greatest and most destructive political failures in human history, an abomination that has brought death, desolation and starvation everywhere it goes… is worthy of a rethink by the New York Times.

In truth, the Times thinks that it is promoting feminism. And it imagines that Communism liberated women. After all, none other than Friedrich Engels promised that women’s lives would be better after the Revolution. A while back, as dutifully reported on this blog, the Times brought us the good news that women in Bulgaria and East Germany had more orgasms while living in the abject misery brought about by Communism. There wasn’t much bread and there certainly wasn’t much cake, but women had orgasms galore. 

Ready to return to those halcyon days? The Times never asked why people in Eastern Europe and everywhere Communism had been tried will go to very great lengths to forestall a return to the unmitigated horrors of Communism.

Yesterday, Helen Gao wrote in the Times that Mao Zedong had liberated women in China. Yes, indeed. If Gao had managed to take off her feminist blinders she  might have taken a glance at Harrison Salisbury’s book, The New Emperors. In it Salisbury describes how Mao sent his flunkies out into the countryside to gather up a bevy of pretty girls. He would happily deflower and rape a different one each evening… showing no concern for the fact that he was infecting them with an STD. Yes, indeed, Mao was great for women. (For the record, Salisbury was a distinguished journalist at... you guessed it... the New York Times.)

Here, without further ado, is Gao’s account. Upon presenting it, we will move on to reality, to the facts, which can be found in prior editions of the Times. Gao has no excuse for lying about Mao. Times editors have no excuse for running propaganda for a regime that produced some of the worst human catastrophes.

Gao is a true-believing ideologically committed feminist. Her ideological blinders obscure her vision:

While the Communist revolution brought women more job opportunities, it also made their interests subordinate to collective goals. Stopping at the household doorstep, Mao’s words and policies did little to alleviate women’s domestic burdens like housework and child care. And by inundating society with rhetoric blithely celebrating its achievements, the revolution deprived women of the private language with which they might understand and articulate their personal experiences.

Like Engels, Mao and his cronies were trying to seduce Western women into joining the Communist cause:

When historians researched the collectivization of the Chinese countryside in the 1950s, an event believed to have empowered rural women by offering them employment, they discovered a complicated picture. While women indeed contributed enormously to collective farming, they rarely rose to positions of responsibility; they remained outsiders in communes organized around their husbands’ family and village relationships. Studies also showed that women routinely performed physically demanding jobs but earned less than men, since the lighter, most valued tasks involving large animals or machinery were usually reserved for men.

Gao does admit that women’s conditions did not exactly fulfill the feminist dream:

Women were shunted to collective neighborhood workshops with meager pay and dismal working conditions, while men were more commonly employed in comfortable big-industry and state-enterprise jobs. Party cadres’ explanations for this reflected deeply entrenched gender prejudices: Women have a weaker constitution and gentler temper, rendering them unfit for the strenuous tasks of operating heavy equipment or manning factory floors.

If you can imagine such a thing, these newly empowered women had to household chores along with their liberating careers:

The party at times paid lip service to the equal sharing of domestic labor, but in practice it condoned women’s continuing subordination in the home. In posters and speeches, female socialist icons were portrayed as “iron women” who labored heroically in front of steel furnaces while maintaining a harmonious family. But it was a cherry-picking approach that focused exclusively on bringing women into the work force and neglected their experiences in other realms.

And, somehow or other, these women were not treated as equals in the factories. Call Sheryl Sandberg. She will know how to solve a problem that is no doubt a mere remnant from feudal times:

Researchers also observed that after marriage factory women often experienced slower career advancement than men as they became saddled with domestic responsibilities that left them with little time to learn new skills and take on extra work, both prerequisites for promotion. State services that promised to ease their burden, like public child care centers, were in reality few and far between. Unlike their counterparts in developed countries, Chinese women didn’t have labor-saving household appliances, since Mao’s economic policies prioritized heavy industry over the production of consumer products like washing machines and dishwashers.

But, despite it all, Communism advanced the feminist cause. That seems to be all that matters to Gao:

For all its flaws, the Communist revolution taught Chinese women to dream big. When it came to advice for my mother, my grandmother applauded her daughter’s decision to go to graduate school and urged her to find a husband who would be supportive of her career. She still seems to think that the new market economy — with its meritocracy and freedom of choice — will finally allow women to be masters of their minds and actions.

Writing in the Wall Street Journal James Freeman is gobsmacked at the Times’s unwillingness to allow reality to undermine its narrative. For an ideologue, the facts do not count. It’s the narrative uber alles.

Freeman counterpoints the Gao narrative with information that appeared in the Times itself. In truth, Mao's Communism produced unmitigated horrors for the people who lived under it.

Freeman writes:

And although Ms. Gao never mentions it, another Times contributor provided important context in a 2010 op-ed. Frank Dikötter described the results of his research into previously classified archives of local and national offices of China’s Communist Party:

In all, the records I studied suggest that the Great Leap Forward was responsible for at least 45 million deaths.

Between 2 and 3 million of these victims were tortured to death or summarily executed, often for the slightest infraction. People accused of not working hard enough were hung and beaten; sometimes they were bound and thrown into ponds. Punishments for the least violations included mutilation and forcing people to eat excrement.

One report dated Nov. 30, 1960, and circulated to the top leadership — most likely including Mao — tells how a man named Wang Ziyou had one of his ears chopped off, his legs tied up with iron wire and a 10-kilogram stone dropped on his back before he was branded with a sizzling tool. His crime: digging up a potato.

When a boy stole a handful of grain in a Hunan village, the local boss, Xiong Dechang, forced his father to bury his son alive on the spot.

That’s not all, folks. Freeman continues to give us a better picture of the Great Famine that followed fast upon Mao’s Great Leap Forward:

In “Tombstone: The Great Chinese Famine, 1958-1962,” Yang Jisheng meticulously documents the suffering, including among women who probably dreamed that the revolution could have somehow stopped before it reached their doorsteps. The author interviewed Zhang Shengzhi, who had served as chair of a county women’s federation in China before the party turned on her family. Many years later, she recalled the experience:

My grandmother and my elder sister starved to death. My sister was in Xi County and died in November. She was left in her home and not buried. The reason was so her family could continue collecting her ration of food, but the communal kitchen had closed down in any case. She was buried the following February. After being left out for several months, her face had been gnawed at by rats and was unrecognizable.

Journalistic malpractice, anyone?

Free Enterprise Is Coming to Africa

While much of the developed world is working off its debt binge, Africa has been moving ahead.

Africa’s progress has not been propelled by massive amounts of foreign aid from guilt-ridden Western celebrities and billionaires. It has advanced economically thanks to Chinese and other foreign business investment.

Free enterprise is coming to Africa.

For some time now I have been posting about the negative effects of guilt-generated charity to underdeveloped countries. MS just sent me an old, but still pertinent, interview with Kenyan economist James Shikwati about foreign aid’s ill effects in Africa.

Shikwati explains how foreign aid destroys local African businesses and farming. It mostly produces a class of corrupt government managers who use the money and the food for themselves, their cronies and their tribesman. When Westerner hand out free food, African farmers go out of business. Thus, the populace comes to depend on free food.

In 2005 he begged the West to stop seeing Africans as pathetic victims who cannot to help themselves.

Surely, Africa suffered from colonialism. Now it is suffering the effects of the do-gooder effort to atone for colonialism. Unfortunately, do-gooders privilege government bureaucracies and place no faith in the Africans themselves or in the free market.

Sound familiar?

Since Shikwati had his say, the aid his not ceased. What has changed is Chinese and other foreign investment.

In recent years, China has been scouring the world for raw materials to fuel its economic boom. Finding massive quantities in Africa it has invested in the continent. You cannot run mines and industry without infrastructure, so China and other nations have been building it.    

Companies are investing in Africa because it is good business.

Africa has attracted, The Daily Beast reports:

… China’s largest sum to anywhere in the world. Tourists leaving Kenya’s Jomo Kenyatta Airport now pass a sprawling landscape of cranes, machinery, and workers building the Chinese-financed, 16-lane Thika Road superhighway. American companies are also making strategic moves. Over the last two years Walmart completed a $2.4 billion acquisition of South African retailer Massmart, IBM announced a $1.5 billion investment in African-focused technology company Bharti Airtel, and U.S. private-equity giant the Carlyle Group launched a sub-Saharan Africa investment practice.

Without offering foreign aid Chinese businesses have done more for Africa’s economic development than the armies of celebrities and billionaires who are whining about how much we owe the Africans.

In the past, Americans may not have connected with Africa much at all; perhaps a friend who was in the Peace Corps or a donation to a celebrity charity. Media coverage has largely been a stream of poverty, war, or corruption, with an occasional safari. But new developments, largely in the business sphere, are changing that narrative rapidly. The simplest breakdown: Africa is growing, Africa is modernizing, Africa is the next consumer market, and Africa’s influence is rising.

From New York to Davos, business discussions echo with references to Africa’s astounding economic growth. While most of the globe is still reeling from the great recession, Africa is booming. It had six of 10 of the world’s fastest-growing economies of the decade to 2010 and is projected to claim seven of 10 to 2015, outpacing the entire Asian region. “Compared to dismal rates in the rest of the world, Africa’s growth is exceptional,” said Gustavo Galindo, a portfolio manager with Russell Investments. “It surprises me many U.S. investors don’t realize the opportunities this creates, [with] some African stocks gaining 15 percent to 20 percent returns.”

The Daily Beast describes what is going on:

In Freetown, Sierra Leone, traditional market traders who previously practiced under-the-mattress banking are getting their first ATM cards and small-business loans. With 80 percent of sub-Saharan Africa’s adult population unbanked, its financial-services sector is projected to grow 40 percent by 2020. In mobile phones Africa has now overtaken Europe in the number of connections and the U.S. in number of users. Apple is expanding shops for iPhone sales across the continent to meet demand of a mobile market predicted to number more than a billion users by 2020.

Of course, there’s still the corrupt bureaucracy to deal with. And the do-gooders will still work to undermine it in the name of their own good feelings.

Africa’s progress tends to prove the wisdom behind Carlos Slim’s response to the Bill Gates/Warren Buffer charitable extravaganza:  “Charity never solved anything.”

And it also demonstrates the wisdom that Nicholas Kristof showed when he explained, in a moment of rare lucidity, that the people of Haiti would do better with more Coca-Cola factories and less charity.

Footnote: Unfortunately, the advent of free enterprises seems limited to sub-Saharan Africa.

In North Africa, the crack Obama/Clinton foreign policy team has managed to empower Islamist fundamentalists who have no interest in free enterprise. In fact, they have no interest in free anything.

Will Techies Save the World?

Famed Harvard economic historian Niall Ferguson spent a weekend among the techno-wizards. He has returned to tell the tale.

Ferguson found that the techno-wizards of Silicon Valley were largely optimistic about the future. They are convinced that their new technologies will be able to solve all of the world’s problems.

If you became rich and famous by discovering problem-solving mechanisms called algorithms you can be forgiven for thinking that what’s good for sorting data can be put to work on a larger, more human scale.

Abraham Maslow once said that if you are a hammer, everything looks like a nail. If you see the world in terms of data, of bits and bytes, then human beings look like data in search of a solution.

For a techno-wizard that means that it’s not a question of how, but when their algorithms will bring peace and love to the world.

Techno-wizards are visionaries; they refuse to remain mired in the past. If they are young or young at heart they have very little experience with the past. Perhaps they don’t know enough to know how much they don't know, but still ignoring the past and ignoring counsels of despair have paid off for them. 

They are young and naïve, but they have been richly rewarded for venturing into worlds that the rest of us never even imagined.

Ferguson finds their optimism cloying. To a sophisticated historian anyone who sees human history as a mountain of data waiting to be managed does not see the world as it is.

On the other hand, cognitive psychologists value optimism. They believe that people are better off being optimistic about the future. Seeing the future as a problem to be solved is better than seeing it as something we need to endure. 

Ferguson explains how the techno-wizards are going to solve the world’s problems:

We heard a description of what Google’s Project Glass, the Internet-enabled spectacles, can already do. (For example, the spectacles can be used to check if another speaker is lying.) Next up: a search engine inside the brain itself. We heard that within the next twenty-five years, it will be possible to take thousand-mile journeys by being fired through tubes. We also heard that biotechnology will deliver genetic “photocopies” of human organs that need replacing. And we were promised genetically engineered bugs, capable of excreting clean fuel. The only note of pessimism came from an eminent neuroscientist who conceded that a major breakthrough in the prevention of brain degeneration was unlikely in the next quarter century.

Ferguson is not very impressed by recent technological advances:

The achievements of the past twenty-five years were actually not that big a deal compared with what we did in the preceding twenty-five years, 1961–86 (for example, landing astronauts on the moon). And the twenty-five years before that, 1935–60, were even more impressive (e.g., splitting the atom). In the words of Peter Thiel, perhaps the lone skeptic within a hundred miles of Palo Alto: in our youth we were promised flying cars. What did we get? One hundred and forty characters.

And he offers a remark by the only pessimistic techno-wizard, one Peter Thiel:

Thiel responded with a classic depressimistic question: why, if information technology is so great, have median wages stagnated in the forty years since 1973, whereas in the previous forty years, between 1932 and 1972, they went up by a factor of six?

Will the new technologies produce change that was as momentous as that produced by the Industrial Revolution? Probably not.

On the other hand, the internet has not been with us for a very long time, so it is difficult to predict the future. At the very least, major industries like publishing, have been seriously affected. Who can predict the ultimate fallout from the Amazonization of retailing? If more people shop at Amazon, fewer people will shop at stores. But, that will not just change retailing; it will also impact the commercial property market.

Google and Amazon will not change the world the way the steam engine or the cotton gin did, but they are not nothing.

But great industrial and technological revolutions produce massive social disruptions. The Industrial Revolution tore apart local communities, sent people hither and yon in search of new job opportunities and produced a wave of social anomie that contributed to many of the major horrors of the twentieth century.

When technology scrambles the social order, people do not know who they are or where they belong. Without understanding the social dislocations produced by the Industrial Revolution we will have difficulty understanding why everyone in Europe was so thrilled at the advent of World War I. If I recall correctly, Herbert Croly commented at the time that Europeans were happy to join the war effort because a full-scale mobilization provided young men with a social structure and a purpose. 

There isn't an app for that.

Ferguson is correct to see that the techno-wizards of Silicon Valley are extremely naïve. They are wrong to believe that Facebook and Twitter are going to solve the world’s problems, but they are also wrong to believe that Blue State policies of income redistribution will solve anything, either.

He doesn't mention it, but these techno-wizards are throwing their money and influence into electing more Democrats. Perhaps it means that they are young; perhaps it means that they are buying protection. Whatever the reason, that much money promoting a political ideology is not nothing.

Ferguson argues:

It’s a dangerous world. Ask anyone who works in the world of intelligence to list the biggest threats we face, and the list is likely to include bioterrorism, cyberwar, and nuclear proliferation. What these have in common, of course, is the way modern technology can empower radicalized (or just plain crazy) individuals and groups.

I wish I were a technoptimist. It must be heartwarming to believe that Facebook is ushering in a happy-clappy world where everybody “friends” everybody else and we all surf the Net in peace (insert smiley face). But I’m afraid history makes me a depressimist. And no, there’s not an app—or a gene—that can cure that.

There’s nothing wrong with being optimistic. All told, it's a good thing. There’s a lot wrong with being out of touch with reality.

If the techno-wizards were investing in new enterprise, that might help the nation. Heck, it might even help the world.If they use their money to found massive new charitable behemoths, then their naiveté is going to cost everyone.

If you are searching for new solutions, even a new algorithm charity is not where it's at. As Carlos Slim famously remarked: "Charity never solved anything."