Global Issues: Harmful Economic Systems--the Major Barrier to People's Welfare and Development
The standard economic model of how things work is that people produce and exchange goods. Governments exist to provide “government goods”— things that people cannot provide for themselves, such as national defense. Thus the standard economic view is that activities are essentially productive. While this view has made for a thriving profession of economics, it is not a correct view of reality. The principal difficulty is that there is economic activity that is unproductive and harmful (from the point of view of those being harmed), and that this is a key feature of the economic organization of societies. What follows is a brief analytical description of these societies.
Many societies are run on this basic set of principals. Take and maintain control of the government. Use powers of the government to obtain income. Key elements of this process are described in four sections:
A fifth section International aspects/imperialism discusses international aspects of harmful economic systems, which many would say is the key part of harm. A sixth section discusses the Impact on development. A final section Reducing harm gives a too brief discussion of what people are doing to improve matters.
The influence on development of poor nations is profound. For many governments, the government/people in the government, in spite of lip service to the contrary, are not principally engaged in helping the people of the country, but rather in helping themselves. This has had and continues to have a disastrous effect on development and the incomes of poor people. The final section of this article discusses this more fully. This article exists to provide an analytical framework to understand the situation and events in many countries, which, considered separately, may be confusing.
There are major international aspects to harmful economic systems. In fact many would say that international aspects are the most important. In order to focus attention on these international aspects, we mention these aspects in a separate section. However international aspects could as well have been included in specific sections above.
A global graveyard for dead computers in Ghana (Photo slideshow) New York Times August 15, 2010
World Bank warns on farmland grab: Foreign investors target countries with weak laws, buying arable land on the cheap and failing to deliver on promises of jobs and investments Javier Blas Financial Times July 27, 2010
Rio Tinto executives in China admit taking bribes David Barboza New York Times March 22, 2010 See article on Transparency International's Corruption Perceptions Index
African producers may litigate over US cotton subsidies Reuters Africa December 1, 2009 Brazil wins cotton war, but the US cuts no subsidies Ann Crotty Business Report December 2, 2009 Cleaning house at the WTO: the US and other developed countries continue to defend their own interests rather than addressing the development concerns of poorer countries (opinion) Kevin Gallagher and Timothy Wise The Guardian.co.uk December 1, 2009
Wealthy nations flock to farmland in Ethiopia, locking in food supplies grown half a world away, with alarming implications for hunger in Ethiopia, critics say Stephanie McCrummen Washington Post November 23, 2009
A new megafarm in Western Ethiopia, for palm-oil trees, sugar cane, rice and sesame. All through the Rift Valley region, there are new fence posts signifying the recent rush for Ethiopian land. In the old days, farmers rarely bothered with such formal lines of demarcation, but now the country’s earth is in demand. One fence stretched on for a mile or more, very possibly belonging to Sheik Mohammed Al Amoudi, a Saudi Arabia-based oil-and-construction billionaire who was born in Ethiopia and maintains a close relationship with the Ethiopian Prime Minister Meles Zenawi’s autocratic regime. Photo: Simon Norfolk/New York Times
Is there such a thing as agro-imperialism? Andrew Rice New York Times November 16, 2009 For further information on the takeover of developing country land by developed country investors see the Grain website.
Niger's president, Mamadou Tandja, far right, next to Alain Joyandet, France's secretary of state for cooperation. French president Sarkozy promised “a new relationship” with Africa three years ago, saying it would be “equal, and freed of the scars of the past.” His first cooperation secretary, Jean-Marie Bockel, later reinforced the message, saying he wanted to “sign the death warrant” of the old France-Africa relationship.” But Mr. Bockel was soon out of his post after offending Gabon's President Bongo’s father with his anticorruption declarations. His replacement, Mr. Joyandet, has been careful to moderate his tone when speaking of African autocrats. Photo: Boureima Hama/Agence France-Press — Getty Images
Anger against France grows in countries formerly part of France's colonial empire as France sides with autocratic country rulers and not the people Adam Nossiter New York Times November 10, 2009
Rwanda's move into Congo fuels suspicion: some in mineral-rich region see broader motives than disarming Hutu militiamen Stephanie McCrummen Washington Post February 13, 2009
Spain and South Africa both "gave the green light" for a failed coup in oil-rich Equatorial Guinea, British mercenary tells court BBC News June 17, 2008 (You will leave this site.)
The politics of United States aid in Venezuela Tom Barry Americas Program, Center for International Policy August 7, 2007
US military involvement is extensive in developing countries. Afghanistan is a major example. Others include:
Corruption as a form of gaining income for international firms is described in the Lynch article.
U.N. Panel Says 2,400 Firms Paid Bribes to Iraq. Oil-for-Food Program Report Alleges $1.8 Billion in Payments Colum Lynch Washington Post October 28, 2005 (You will leave this site and be required to register [once] with the Post.) Oil-for-food scandal: key reports BBC News (You will leave this site.)
The Bond article presents the idea that resource wealth has been taken from Africans to the benefit of developed countries.
Dispossessing Africa's Wealth Patrick Bond November 24, 2005
The impact on development of harmful economic systems has been enormous. Try to think about some of the consequences of what has been described above. They include war, continued devastation over centuries, and control of the government and productive resources, that have left hundreds of millions confronting starvation, while those who "govern" and "own" live very well. A recipe for disaster! And we should not blame the victims--poor people across the world. Rather we should think about how we can help them.
Neglect of ordinary people.
Elites, in control of the government, have directed resources toward themselves, and not towards the poor.
Controlling the government, Pakistan’s elite pay few taxes, widening the vast gap between rich and poor, hindering development, and creating conditions that have sparked insurgency Sabrina Tavernise New York Times July 18, 2010
North Korea's giant leap backwards: Last year's disastrous currency reform wiped out savings and caused healthcare to collapse--now many fear another famine Barbara Demick The Guardian July 17, 2010
Water need is high in Fertile Crescent: Government regulations not heeded IRIN News June 23, 2010
Millions in Kenya free primary education funds appear to have been stolen--World Bank, British government suspend funding Afrique en ligne December 19, 2009
25 years after Live Aid, Ethiopia tries to cover up a new famine Times Online November 18, 2009 Also see Ethiopian government inaction, repression, and obfuscation is a major cause of the developing Ethiopian famine (opinion) Alemayehu G. Mariam Huffington Post November 25, 2009 See Hunger Notes special report: Harmful economic systems
High food prices force Kenyan slum dwellers to go hungry IRIN May 27, 2009
The real hunger crisis--persistent poverty in rural Africa and South Asia Robert Paarlberg Foreign Affairs May 24, 2009
Tanzania's ruling elite neglect agriculture and poor farmers Ng’wanza Kamata University of Dar es Salaam May 24, 2009
Half the people in Zimbabwe will be dependent on food aid by the end of the year, humanitarian groups warn Al Jazeera February 7, 2009
Seven-year-old Sinikiwe cradles her young brother Simba. Hunger stalks their family. Their local church, supported by the charity Tearfund provides what little food, clothing and seed they have. Photo: BBC
Disease and starvation in Zimbabwe Paul Martin BBC News January 15, 2009
War War, caused by armed groups seeking to control the government, or territory or resources, has devastated vast regions of the world, and more importantly, vast numbers of the people of the world.
Fifteen years of conflicts have cost Africa around $300 billion--equal to the amount of international aid received Oxfam International October 12, 2007 See the full Oxfam study
Where is there major armed conflict now? These countries include Iraq, Afghanistan, Sudan, Somalia, and Israel/Palestine. Where has there been major conflict in the past which has abated (in varying degrees), but which has still greatly affected the society and its progress? The Democratic Republic of the Congo, Angola, Mozambique, Liberia, Rwanda, Burundi, Sri Lanka, Peru, El Salvador, Guatemala, Northern Uganda, and Colombia--to name a few. Governments, including tax collection, essential public services, and a fair judiciary, are not easily reestablished after a war (if they ever were established in the first place).
How many people live lives of greatly diminished productivity (and happiness) due to conflict!
Misery hangs over Gaza despite pledges of help Ethan Bronner New York Times May 28, 2009
Pakistan seeks aid for 2 million displaced Al Jalazeera May 21, 2009
In Kenya camp for Somali refugees, opened 18 years ago, many people have never left, others arrive daily BBC News May 15, 2009 Some 600,000 displaced in Kenya BBC News February 11, 2008 (You will leave this site.)
Death of rebel leader marks end of years of fighting in Sri Lanka Emily Wax Washington Post May 19, 2009 'More than 1000 civilians killed' in attacks on Sri Lanka safe zone--UN says feared bloodbath has become reality Gethin Chamberlain and Mark Tran The Guardian May 11, 2008
Armed Conflicts Now the Leading Cause of Hunger Emergencies, FAO Says (May 23, 2005) See also the excellent earlier study by Messer, Cohen and D'Costa Armed Conflict and Hunger.
The past five centuries or so have seen considerable hardship for the people living in many (now often past) societies. Africans may be taken as a key example
There has been a struggle for thousands of years by human beings in many different ways against the sort of subjugation described above. To name just one very important example, the world's religions have worked to establish a set of principles for human relationships that were very much against oppression, and though the religions were persecuted for doing so, they did manage to establish at the very least a set of guidelines for human behavior. In all countries of the world there has been a struggle against injustice, and attempts, which have met with increasing success, to establish the societal frameworks for a more just and equitable society. This is a long (and inspiring) story which we cannot recount here. The current efforts in the world to reduce harm include reducing corruption, moving to more democratic governments with established rights and processes (by means such as reducing the influence of the military and improving the fairness of elections--and having them! and reducing police brutality), and, internationally, reducing the advantages which developed nations have assigned to themselves through their control of international institutions, such as United Nations, the World Bank, and the World Trade Organization.
In recent years, there have been important efforts to have elections that express the will of the people and to implement policies that reflect an electoral mandate. Nations are evolving from power structures that have been based on some combination of military, economic and political control to ones that reflect the wishes of the (often very poor) people. This evolution has not been easy. One publication that attempts to track this evolution is Freedom House's annual survey. Survey finds world freedom reduced in 2007 with one-fifth of countries showing declines Freedom House January 18, 2008
The Indian state of Andhra Pradesh empowers the poor to fight corruption Lydia Polgreen New York Times December 2, 2010
Brazil elects a woman president: Brazilians vote strongly in favor of continuing the economic and social policies of current president Lula da Silva Alexei Barrionuevo New York Times October 31, 2010
Leonel Gómez, 68: Salvadoran activist led probe into killing of 6 Jesuit priests Patricia Sullivan Washington Post December 15, 2009
Bolivian president Morales reelected with 61 percent of the vote; plans to deepen social revolution James Painter BBC News December 7, 2009
The countries of Latin America are countries where a minority have, since the Colonial period, controlled the government and sources of income and wealth. Venezuela, Bolivia and Ecuador are three countries where dissatisfaction with government policies has led to voters installing more populist governments. (Others include Brazil, Argentina, and Peru.) These governments are now under severe strain as they have tried to implement policies favoring the majority.
South America's constitutional battles Monte Reel Washington Post January 18, 2008 (You will leave this site, be required to register once with the Post and thereafter sign in using your email address.)
The policies of the previous governments of these countries (and many others, including Brazil and Argentina) have been described as 'neo-liberal,' meaning ones that
The citizens of a country own the national resources of the country. (This may be difficult for people in the United States to understand, given that the United States has typically given these rights away to individuals and corporations in the United States.) Examples include land, mineral rights (the right to extract what lies under the land--a somewhat strange concept, as it divides up land rights, but nonetheless, one that exists in U.S. law), and the broadcast (radio, TV, and other communications) spectrum. One important issue is that these governments are attempting to improve the benefit that citizens receive from these rights.
A riot police officer keeps watch over residents shouting slogans outside the military airport in El Alto, where the governor of the northern province of Pando was to arrive after being detained on genocide charges. Photo: Aizar Raldes/AFP/Getty Images
Negotiators inch forward in Bolivia Patrick J. McDonnell Los Angeles Times September 17, 2008 Bolivia expels US ambassador on grounds of encouraging the country's breakup BBC News September 4, 2008 (You will leave this site.) Bolivia sets date for referendum on new constitution in face of strong opposition by 5 state governors--land distribution to poor people, control of oil and gas revenues key issues BBC News August 29, 2008 (You will leave this site.)
In the mostly indigenous city of Warisata, President Evo Morales greets a crowd of several thousand people commemorating Bolivia's National Day of the Indian. Photo: Evan Abramson/Washington Post
Bolivia sets date for referendum on new constitution in face of strong opposition by 5 state governors--land distribution to poor people, control of oil and gas revenues key issues BBC News August 29, 2008 (You will leave this site.) Bolivia referendum keeps both President Morales and opposition state governors in office--deep divisions continue BBC News August 12, 2008 (You will leave this site.) 2008 Bolivia stories