Saturday, May 17, 2014

Economists, Politics, and Global Poverty (Part II)
A reviews of books that are important critiques of economists.

“The Idealist is a profound and moving story of what happens when the abstract theories of a brilliant, driven man meet the realities of human life.”
-- from the book cover

“A riveting narrative that must be read to understand why the over $700 billion pumped into Africa by the West since 1960 has achieved so little. This powerful book will shake up the foreign aid and development community.”
-- George Ayittey, president of the Free Africa Foundation and author of Africa Unchained

“A powerful exposé of hubris run amok, drawing on the touching accounts of real-life heroes fighting poverty on the front lines.”
-- Robert Calderisi, author of The Trouble with Africa

We have no water. We have no oil. We have no minerals. If you say to me, “One day you will grow crops,” I will ask you, “From where will you get the water?” If you say to me, “One day there will be industry,” I will ask you, “From where will you get water?”
-- A quote from the book by Ahmed Maalim Mohamed

Jeffery Sachs, a celebrated economist from Harvard and Columbia and author of The End of Poverty, in 2006 launched the Millennium Villages Project in Africa backed by $120 million raised from donors. This book by Nina Monk is a first hand account of both the vision and the real-life challenges and difficulties that confront this type of academic, centralized, and idealist approach to solving poverty in Africa.

In the early 1990’s, Jeffery Sachs and and a dozen colleagues from the Harvard Institute for International Development advised a type of “shock therapy” reform to bring markets and capitalism to Russia after the fall of communism. A qoute from The Idealists states that Sachs was naïve and that he was defeated by a massively bloated and corrupt economy. “In one decade, between 1989 and 1999, Russia’s GDP dropped by half. State assets were systematically looted, and anything of value -- raw materials, for instance -- wound up in the hands of a few clever men.”

Russian communism had described itself in economic terms, when in fact it was a totalitarian political regime. Communism advocated, at least in theory, equality as the common ownership of the means of production, but it has in actuality denied political equality as well as the moral agency of other people. In response to the fall of communism our economists all proposed capitalism and the academics, the media, and our government all began to refer to our government as a capitalistic democracy rather than a constitutional democracy. The the appropriate response to the fall of communism should have been a constitutional democracy.

In my book, The Moral Foundations of United States Constitutional Democracy; An Analytical and Historical Inquiry into the Primary Moral Concept of Equality (1992), I wrote the following concerning this issue:

It would be ironic to accept as a premise of public discourse on constitutional democracy the ideology of Marxism which portrays the economic system to be determinative of the political system, rather than just an integral and interdependent part of society and the government. What is important to recognize is that is that our economic system, for example the extent to which we are a regulated capitalism or a social welfare state, is determined by constitutional and legislative political processes based on equality. Given such political processes based on equality, it is not irrational for a people to recognize defined property rights, reward production and merit, and incorporate several aspects of distributive justice.

Russia, without a check on governmental powers, in the early 1990’s became a kleptocracy which benefitted mostly members of the old KGB. It is now under Putin becoming an autocracy.