Sometimes I just stumble across gems that have such clarity I must share on this blog.
This one is from Dambisa Moyo a Zambian economist, educated at Harvard and Oxford and a former employee of The World Bank and Goldman Sachs. In her book titled “Dead Aid" - Why Aid Is Not Working and How There Is a Better Way for Africa, she makes a great point on why all liberal programs fail.
However, there are many, many other reasons why giving or sending billion dollar packages in the form of US dollars, for example, into small economies is very harmful. For example, you can see why having that kind of money flying into a country makes the government less inclined to raise money through other sources of capital because they have this steady flow of permanent income, what they perceive as permanent income coming in.
The government develops what I call a ‘Lazy muscle’ and this breeds dependency which means that governments are not focused on actually building up other sources of capital such as the private sector which is important for growth. In particular it’s no surprise that things like education, health care, infrastructure, and even security are now being provided to Africa from outsiders and that leaves a situation where African governments have a questionable role – what is the role for African governments when they are not responsible for those things.
This works on the individual level as well. Imagine you are a farmer in Africa who borrows money for seed, works the land to raise a crop and sell, only to see pallets of "free" food dumped in your country. What incentive is there to work hard or "pull yourself up" is there in these conditions?
Now consider America's never ending "war on poverty". We've spent trillions trying to "help the poor" and we have generations of families no better off than before the war started. Government agencies will pay for housing, education, food, health care and now even mobile phones!
Why would I want to lift a finger to get myself a job when it is more advantageous to stay home and breed? The liberals don't care because as long as they have you stuck on their "liberal plantation" they assure themselves an angry voter who will keep electing liberals promising even more handouts.
Without any incentive to create, learn or grow, the inner cities simply deteriorate into third world slums with more and more dependent people waiting on their government check. What a waste of human potential.
But if you offer an incentive like vouchers that allow students to flee corrupt and failing public schools, and encourage business, churches and individuals to take on the task for educating future leaders, suddenly you have improved the lives of millions of children, parents and all of society. We might finally break the cycle of failure and dependence that has plagued this country since liberals first came to power.
If we raise the expectations that independence is both noble and expected, you might see more people finding jobs, creating jobs and seeking their own way out of poverty.
But as long as you keep handing out everything, you will kill any desire to be independent and condemn another generation to the liberal plantation.