Monday, July 11, 2005

Wealth or Poverty are Choices - a mild rant

I have been in correspondence with a friend who is on a tour of duty for the UN in Kosovo. His description of what is going on there between Serbs and Albanians is quite disgusting. Nobody sane could take sides and each side has enough insane hatred to go round twice with lots to spare. The consequence is dreadful levels of deprivation all round with, as usual, mothers and children bearing the brunt of it, and winter is only a few months of hell away, and then it gets worse.

Innocently, I placed my views of Human Rights into this context and he temporarily ‘lost it’ with me. Such rights as I espoused (pensions, sick pay and holidays) were so far removed from the situation on the ground in Kosovo that I must have appeared ‘nuts’. He felt it would do people like me some good to experience the ‘chill wind of poverty’ before they open up on unrealistic dreams of Human Rights in poor countries living the Hobbesian nightmare each night and near starving and freezing during each day.

Whether we should impose the 'chill wind of poverty' to bring about responsibility has interesting echoes with the policy debates of the late 18th century, at that time mixed up with notions of the proper way to keep labourers working hard - keep them on low wages, or tempt them to work harder and longer by higher pay per hour? They even brought in laws to prevent uppity labourers buying goods 'above their class'. Societies, thankfully, have grown beyond such ideas, though remnants of them re-appear now and again (I heard recently from a correspondent going on about letting Turkey into the EU – apparently the Turks, and the Kurds, do not ‘deserve’ to be let in).


I told him that his account of life in Kosovo is indeed harrowing and that I expect not much from the UN agencies, as I have worked for two of them (FAO and UNESCO), and even less from the NGOs. The UN on a moral level is much over rated. Members sign up to the UN Charter and the Declaration on Human Rights and then disregard both in their domestic affairs.

But disregard for Human Rights and not delivering them does not alter their status as Rights. The opulence delivered by markets that work makes certain of our ‘rights’ possible. The absence of resources for them in economies that do not work makes these ‘rights’ unavailable. That is the challenge.

Even in working market economies the choice for opulence is not inevitable. That was what "Wealth of Nations" is about. We have choices and often for various reasons we do not make them. Where race, religion and fanaticism get in the way we are prevented from making the correct choices that would bring greater resources from wealth creation that would feed and clothe the poorest citizens (Smith’s distributive justice).

Smith was quite pessimistic about the prospects for wealth creation. And wealth, remember for Smith (and I hope us), is not piles of money, gold, silver and other scarce goods. It is the annual produce available for distribution, acquired by the annual level earned by producing it. If it is not earned it is not produced and cannot be distributed, so that mothers can get clothes for their children.

No amount of despair, pleas and gnashing of teeth will make clothes available on a sustainable basis by any other method than society producing what it needs in Smithian markets. The ex-communist, and not so "ex" are proving this every month at present.

The tv each evening is full of pictures of people destroying the wealth creating means in country after country. "Burn, Burn and Burn again" is the mantra of the forces of destruction. Seeing shots of wee boys, ten or so, carrying grenade launchers and machine guns, and without doubt used to firing them with the aim of killing and maiming fellow citizens at the behest of war lords, is always depressing. I used to call this phenomenon “Man’s Avoidable Disasters” (MADs). The consequences are inevitable as they were long before in human history: people without food, clothing and shelter, let alone the decencies of life but with a surfeit of the brutalisation of human relationships that goes with it.

Adam Smith was conscious that after the Fall of the Roman Empire, western Europe suffered near on a thousand years of this kind of strife. It destroyed the commerce and the agriculture of Europe, impoverished most people and took a long slow period of local peace to bring about its revival. There is nothing inevitable about growth. It is so easy to destroy it, either by the ‘barbarians at the gate’ or by the self-willed destruction of the means to growth in fantastic experiments in ‘socialism’, ‘state regulation’ and ‘no growth’ economics by the wilder of the well meaning Greens.

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