Ahead of the G8 summit, which kicks off Wednesday in Scotland, several organizations dedicated to ending worldwide poverty have been getting lots of attention. These organizations, which include Live8, One, and more, hope the recent outpouring of support for their cause will pressure the world leaders at the G8 to appropriate funds to ending poverty, particularly in African countries.
If the statistics can be believed, they are staggering. Over a billion people worldwide live on less than $1 per day and every day, 30,000 children die due to extreme poverty.
There are obviously millions of people who are rightfully sickened by these statistics, to the point that they’re driven to do something about it. It is just unfortunate that they are spending so much effort lobbying politicians, instead of devoting their time to methods that could actually help achieve their goals.
As you would probably guess, I am not in favor of the government taxing its citizens and redistributing the money to other countries, but in this case that is beside the point. This is a lost cause from the beginning. Government is no more capable of ending world poverty than it is capable of ending domestic poverty, drug use, or terrorism.
First of all, this is really an uphill battle because they are trying to get eight governments to agree to do something. Even if that happens over this three day summit, it will take years before each of those governments appropriates all of the aid money they promise.
Once the money is appropriated, like all government programs, they’ll find out they need more than expected. Much more than necessary will go to bureaucracy, leaving less for the poor. With such a huge budget, it will be difficult to track where all the money goes. This creates huge holes for corrupt government officials. We need to look no further than the recent Iraq Oil-for-food scandal, or the squandering of previous African aid money for examples.
For a solution that will work, these activists should look towards the free market. The governments should only be asked to reduce or eliminate current tariffs or trade restrictions to these countries.
With apparently millions of activists waiting to be mobilized, just imagine the amount of money that could be raised privately, or the number of new volunteers that could be recruited into such a noble cause. Private organizations are notoriously more efficient with money, and can no doubt do more-with-less.
If the US government would stop subsidizing domestic farms and end all tariffs and trade restrictions to these countries, the benefits would be huge. Companies would have an incentive to move into these countries to take advantage of the cheap labor and overall low manufacturing costs. This would provide jobs to the citizens and would improve the overall quality of life. One needs to only look at China to see how an economy in a similar position can thrive.
I am truly saddened by the extent of poverty that exists in Africa today, but it is just depressing to know that so many people are putting their faith in government, an institution with an absolutely pitiful track record, to solve this crisis.
UPDATE: Just found this article by Alister Heath through the Free Market News Network. He makes my point much more eloquently than I ever could.