catallaxy files

catallaxy in technical exile

How to help the people of the Third World?

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Have the well-meaning socialists and big government interventionists learned anything from the failures of local policy and foreign aid to the poor states of the world?

Have they picked up anything from Peter Bauer who studied these matters at close hand from the 1940s?

For decades Lord Bauer stood alone in opposition to the view that only planning and foreign aid could produce economic development in poor third world countries… He watched marketing boards destroy a flourishing peasant agriculture keyed to exports, forcing the peasants back into subsistence farming… In theory, the marketing boards were set up to stabilize prices. In practice, the boards were used to confiscate the farmers’ profits. The main result of development planning, said Bauer, was to destroy individual initiative, which is the most important factor of production… Bauer’s dissent on development was based on his realization of the importance of traders in moving an economy from subsistence to exchange. This critical activity of traders was curtailed by the regulations imposed by development planning… With planning and aid came poverty and war. Foreign aid, Bauer noted, made control of the government a life-and-death matter, causing genocidal warfare between tribes. He did not spare his muddle-headed colleagues, who fervently believed they were doing good by socializing poor lands when any fool could see that not even England could afford socialism… Bauer’s books on development economics are the only ones worth reading. The rest are evidence of a pathology of delusion that wrecked the lives of millions of innocent people.

More reading for Mark Bahnisch!


Written by Admin

May 17, 2006 at 8:06 am

Posted in Uncategorized

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