April 18, 2009
The Economics and Theology of Aid

William Easterly invites a response to his earlier post on a prayer for the end of poverty that reads "(t)he world now has the means to end extreme poverty, we pray we will have the will." As I read it, the prayer means "the political will to transfer resources from rich people to poor people, using force if necessary." The response closes with the following question: "What is the theology of not vigilantly supporting and/or advocating the most effective poverty solutions available?"

It's an excellent question (more on my suggestion in a minute) but my knee-jerk response is to answer a question with a question: "what is the theology of vigilantly supporting and/or advocating anti-poverty programs that are demonstrable failures?" To paraphrase Murray Rothbard, what is the theology (and ecclesiology) of having outspoken opinions about economic issues while not knowing any economics? In his excellent book The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy, Thomas Sowell speaks of an imperviousness to evidence that, I'm afraid, characterizes a lot of advocates of anti-poverty programs. Note that I did not say "people who wish to eradicate poverty" because people who wish to eradicate poverty and supporters of anti-poverty programs aren't necessarily the same people. While we're speaking in Biblical terms, a lot of aid programs in the last five decades have given us a lost half century of terrible stewardship.

So what are the alternatives to failed aid programs? I offer, once again, Lant Pritchett's Let Their People Come: Breaking the Gridlock on Global Labor Mobility, available for free download from the Center for Global Development. Pritchett estimates the global gains from an international free market in labor, shows that they dwarf any and all gains from even the most successful aid programs, and casts the international immigration in explicitly moral terms. I would therefore rephrase the question asked at the end of Jonathan Denn's response to William Easterly: what is the theology of vigilantly supporting and/or advocating the use of force to prevent mutually beneficial voluntary exchanges, particularly when those voluntary exchanges have the potential to carry us a long way toward the elimination of extreme poverty?

Along those lines, here's a picture I drew on my office whiteboard after reading Pritchett's book (meme HT: www.thisisindexed.com). While she was visiting Rhodes, Deirdre McCloskey kindly asked to be added to the intersection. This perhaps suggests a new personal mission statement: make both sets bigger, and increase the degree to which they overlap.


Posted by Art Carden at 04:14 PM in Economics

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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