The Scrooge Factor

Fire of Liberty

I wanted to follow up on my earlier posts on how the Live 8 crowd, Kofi Annan and European leaders continued advocation of sending loads and loads of money to Africa to fight poverty and famine only leads to greater problems. Well, it seems that there is a plethora of experts and learned people who realize that as long as you continue to pour such vast amounts of money at the problem, the people will continue to suck at the teat and never learn how to let go and learn how to solve their problems on their own accord. As I continue to read Marvin Olasky's wonderful book The Tragedy of American Compassion, I discovered that up to the late 1890's in this country, you'd find countless examples of various charitable groups requiring individuals who sought help in the form of food and money would have to either chop several cords of wood or provide some kind of work instead of an outright handout like the various nations want to do in Africa. If they really wanted to improve the lot of the millions of people in Africa, they'd listen to the people who advocate the West weaning these nations off their teat of governments who continue to give money out of the fear of beeing dubbed a scrooge. In fact, I'd say that a Scrooge-like attitude is what's needed in dealing with the problems of Africa. While your allowed to argue "My dear man, your quite wrong about this," I can't ignore the whole argument about how a massive inflow of money is not good for the goose or the gander. Just look at this snippet from a recent article over at Tech Central Station by Max Borders:

And yet the answer is staring everyone in the face. One need only look at the data. But you can use common sense to understand why foreign aid doesn't work. (Most of us couldn't even tell what precisely it does not work at - only that places like Africa only languish, grow increasingly dependent, less likely to change, and more corrupt. These problems get worse as more of our money is poured in.) Fifty years of the domestic welfare-state status quo in the US should have taught us that a global welfare state would be even more expensive and even less efficacious. Only since the Welfare Reform Act of 1996 has the US seen an overall decrease in the number of people at the teat of FDR's dole. And only with some similarly half-baked reform will we start to see real GDP growth in the developing world. Why? Because it's almost an iron law of human beings: if you reward any behavior, you're more likely to get more of it.

In Africa, all the wrong behaviors are being rewarded:

Does your country have a) a dictator surrounded by ruthless cronies? Or b) the rule of law?

"Answer A!"

Give them $50 million!

Does your country have a) nationalized agriculture? Or b) privately owned farms?

"Answer A!"

Give them another $50 million!

Borders might be a tad bit on the "classical liberal" side but he still has a point in noting how this constant mantra of "more money," is probably one of the biggest reasons why poverty and famine is so prevalent in sub-Saharan Africa.


Another voice calling for the West to shut-down this unlimited ATM to the nations of Africa is Michael Ledeen. Ledeen notes in a recent article over at National Review Online how the continued call to send more money to the various national government in Africa without any strings attached is yet another green light for continued corruption and wasteful spending via the powerful leaders or dictators who recieve these funds. Just look at South Africa to understand what Ledeen is meaning:

But the problem is not how the money is allocated; it'’s that the money is all allocated by the central government, and that is always a guarantee of corruption. Just as Africa needs less aid, it needs less government. In South Africa, for example, which is the best of the big states, the government is murdering its own people by urging them to use traditional remedies (ginger and garlic, sometimes flavored with lemon zest) for AIDS, rather than anti-retroviral drugs. And the leaders of the African National Congress — the governing party that holds more than two-thirds of the seats in parliament, and can therefore pass any legislation it wishes — has not lost its traditional zeal for Communism. Here'’s a newspaper account from The Star on the Fourth of July:

The ANC is not only set for a serious review of the constitutionally entrenched right to property (perhaps inspired by our very own Supreme Court?), but is also considering a moratorium on the sale of land to foreigners...

Delegates (to the party'’s national general council) also called for an investigation into the inaccessibility of prime land due to high prices and for property prices to be regulated.

Instead of wasting countless sums of money in the countries of Africa, Ledeen notes how the people would better be served by the forces of free-market capitalism and the "little platoons" espoused by Edmund Burke. For the free-market aspect these countries would be better served by establishing stronger property right laws thus providing a more stable environment for direct investment in factories and businesses by western investors. As for providing food aid and the much needed medicines to fight malaria and AIDS, the West should send more money to various private charities like the Agathos Foundation, who are held accountable for their finances and operational activities thus ensuring the monies are spent on what they were given for. Remember, that Scrooge kept his buisness going all those years because he kept a close watch on where every penny and shilling went. If you had more Scrooges in the world who were more wary of giving money wily-nily to any nation that cries "more money, more money," then the countries throughout sub-Saharan Africa would be better off instead of the status quo where the leaders grow fat and buy more fleets of S600L Mercedes-Benz for their friends and themselves.