So You Want To Help Africa?

Original Post (with comments)
Did you ever wonder why Lex Luthor could abuse his henchmen, the man-children who could have easily stomped him into the dirt? If you did, it probably wasn’t for long. He had something over them. He had some form of control. It was either the promise of riches or the threat of physical injury. In the case of latter, how, one might ask, would little Luthor pose a credible threat to a menacing minion? Simple, the rebellious henchman would be handled by upstart henchmen looking to make a name for themselves – key word, themselves – even the biggest guy can be felled by a group. It’s like a circle of fear, with the guy at the top calling the shots. It occurs to me that, though this theme is almost cartoony in the Superman series, it is very real in places like Africa.

I recently watched the movie, Hotel Rwanda. It’s like an African version of Schindler’s List. A hotel manager finagles the safety of 1200 plus refugees during the genocide that took place in 1994. A sobering experience, this movie (but worth watching, for certain). As usual, I ended up focusing on the background, rather than on the compelling story of the main character. I was taken in by the abject absurdity of it all. The whole conflict was based upon the differences between two groups, the Tutsis and the Hutus.

What made them different? If Hotel Rwanda is historically accurate (once again, I’m too busy for good diligence), The Belgians. Back in the days when people bought into social Darwinism, the Belgians were colonizing Rwanda. They segregated the indigenous population based upon physical appearance – the fitter looking people (they measured the bridge of peoples’ noses) were designated as Tutsis. The rest were Hutus.

From there, these European geniuses arranged the economy to have the Tutsis making the decisions while the Hutus executed them. Obviously, over time, there developed a significant resentment on the part of the Hutus toward the Tutsis. The conflict in 1994 was the culmination of that resentment – the Hutus took control and began the systematic removal of the Tutsis from the Rwandan landscape. They purposefully targeted children to eliminate the next generation. And people wonder why Africa has so many problems.

Here we see a classic example of the caveman mentality run wild. The people of Rwanda grabbed onto the notion of in-groups versus out-groups, a standard issue tendency in the caveman mind, and took it to its most heinous ends. The sad irony is that the distinction between the people was arbitrary with respect to any notion of human value. It was based upon looks, which absolutely do not correlate with worth as a person. All it took was the enforcement (by the Belgians) of this distinction for a few generations and the caveman mind was primed to continue the phenomenon indefinitely. Had they only immediately rejected the division when the Belgians left town, all of the bloodshed would have been avoided. Is this not curious?

Not really. Once a certain group has attained a particular standard of living, regardless of who is propping up the fantasy, they are unlikely to relinquish it. So the Tutsis clung to the distinction, which further flamed the fires of resentment in the Hutus. It’s a Pandora’s Box situation, I think, but what are we to make of it?

This matters when we think about the concept of aid to Africa. What exactly do they need? Is it food? Certainly. Is it water? Most definitely. So we should send as much of both as we can? Uh, no. The fact is that the situation in Africa is one in which resources are not exactly distributed equitably. The very same mentality that accounts for the pervasive conflict on the continent accounts for the fact that aid resources rarely make it to their intended destinations. They fatten the wolves and serve as bartering chips with other wolves. It’s a caveman’s world, but there is a solution, a not so pretty one.

If Africa is to truly be helped, force is the only answer, systematic force aimed at eliminating the arbitrary divisions between the people there. A vast marketing plan for human rights, a la Thomas Payne’s “Common Sense,” would have to be put in motion to start. Then, forces would have to be installed to prevent discrimination on the grounds of the prohibited divisions. But, as I said, this is not pretty.

It requires us, and I mean all of us, to acknowledge the notion that our culture is better than the African culture. We are not saying that our people are better than theirs. We’re saying that the way we’ve set up our society promotes the kinds of life experience that every human deserves. Our society is better, but we have no exclusivity on it. There are but two important conditions that must exist to enable any population to experience the fear-free lives that most of us in the Western world experience – firm belief in the validity of human rights and the rule of the law, and the courage to enforce those beliefs. Isn’t our aid misguided if we’re not committed to fostering this in Africa?

Oh, but this sounds very neocon, doesn’t it? Liberals will shriek at coming right out and saying that our way is better, yet they believe it deep down as much as anyone. They’ll recoil in horror at the thought of pointing guns at African power-mongers who’d as soon burn everything down than walk away quietly. But the fact remains, someone has to get dirty if Africa is ever going to break free from the cycle of conflict. Sending $654 million in “aid” is our way of avoiding getting dirty. Let’s at least call it what it is. In closing, read Mark Steyn’s recent column. He’s got it nailed.


We Have It So Good – Perspective Part 2

Original Post (with comments)
This country is still very much divided, unnecessarily so. Yes, there are issues about which many people disagree, and there are worthwhile opinions to be found on both sides of the divide, but the fact is that most of the fuss is manufactured by politicians who have everything to gain by pitting one side against another. Given that the political philosophies that once underpinned the Democratic and Republican parties have long since been extinct, it seems that the team mentality is driving the bus nowadays. So with roughly half the masses in Democrat jerseys and the other half in Republican jerseys, the stage is set. The politicians appeal to each team’s desire to win, to their desire to vanquish their evil competitor, and they do so by creating the appearance that, if they lose, America goes down the drain. I can’t even count how many times I’ve heard someone say, “Bush is ruining America!” or “The liberals are out to destroy everything this country stands for!” People, it’s time for a reality check. What follows is an email report from a guy serving in the Peace Corps in Togo (West Africa), which has been in the midst of some serious political upheaval.

Subject: A Brief Hello & Update From Togo
Hello Everybody,
Hope all is well back home in The Good (According to many these days, The Big Bad) Old US of A.. While briefly in Lome I wanted to take the time to let you all know how’s it going here.

Good news is things are relatively calm in Lome and especially throughout the country and other than a couple opposition rallies which took place past resulting in some people killed (In Lome) by the government supported military things are honestly quite safe. I’ve been back in village these past weeks continuing my work which is going very well and it’s not too surprisingly one of the safest places to be as politics don’t reach so far out as the rural bush (Not many politicians could stand a dusty and bumpy ride out to a place with no electricity and without the modern comforts). Most of the villagers can’t read Ewe or French and haven’t even got an elementary level education so the inter workings of politics are somewhat out of thought for them on many levels. What’s on our minds today? What’s going on in the Capital or what my family will eat and whether the crop is growing well to sustain us throughout the rest of the year. Answer # 2 would be more correct. This is not to say that many, especially the men, in village aren’t having a wonderful time discussing their hopes for the future with what’s recently happened.
The death of Eyadema and his 38 years of justiceless rule can make for change and a chance at democracy for these people. It is for sure a very interesting time to be in Togo and I’m learning quite a bit about African politics. Much I’m seeing and learning of these politics is very very sad and very well hidden from the outside world. One shocking thing is that Eyadema was a good friend of the French President Chirac and he has also contributed large amounts of money (Togolese money and wealth) to support Chirac’s election campaigns in France. A developed nation President taking money from a poor small country such as Togo! The last thing money should be doing is leaving this country. I am truly convinced that France continues to help destroy this country rather than help rebuild it and this is quite a sad reality. Our World Needs Way Better Leaders! I’ll have more to say on this whole thing in my next official update to you all, so stay tuned.

One thing I can propose to you in the meantime is to take the time to open your eyes and seek out to inform yourselves about what goes on around you in this world especially outside the USA (With the wide existence of the internet today this is so much easier to do). Make an effort to know what’s happening to people. The injustices and inhumanities are mindblowing and most often the world hardly ever notices! It’s quite sickening.

Take good care of yourselves and again thanks to all sending me their well wishes, love, and support. It’s great to have. Hope you enjoy the photos.

Peace Be With You,

Folks, I have a truly hard time mounting anything close to outrage about anything domestic when I read things like this. We have come so far in the US that we have completely lost perspective on what life can be like, and is for many, many people on this planet. If we could just take a step back and reflect upon how good we have it, I think we could find a way to let go of some of the team mentality. Like Chirac in the email above, our politicians are doing dispicable things in the name of leadership, and we, instead of calling them on it, brush their actions aside because the alternative is unthinkable – our team might take a beating in the next election.

After 9-11, we came together as a nation. We remembered what it really means to be an American – to live in a land where people are free to live as they choose, to live in a land where prosperity is the norm, not the exception, to live in a land where the rule of law is a given, where there is equality of opportunity the likes of which this planet has never seen. This happened because an event transpired that forced us to turn our attention away from domestic in-fighting and toward an enemy whose greatest goal is the demise of our republic. Granted, the unity was only a tad longer than the blink of an eye, but it happened, and I hope I am not being too idealistic in hoping it could happen again, but under less devastating circumstances.

As I have said before – there are two teams in this country, but they are not the Republicans and the Democrats. They are the weasels serving, nay plundering, as politicians and us, the people who are being stirred into a frenzy to take the focus off their nefarious activities. The time has come to put aside the differences that are so largely cosmetic and come to realization that Joe Lunchbucket and Jan Q. Public really aren’t that different from one another. Both want the best for their children, both hate the thought of people who are down and out, and both would rather leave politics to people with the time and inclination to do their homework. Of course, there are issues about which they will differ greatly, but those, in my view, are beside the point. Until those who represent us locally and in DC deserve the title of “civil servant,” our efforts should be aimed at replacing them.

Now I’ve been around long enough to know that what I wish for is about as likely as free elections in Iraq. Okay, bad example. As likely as a Red Sox world series. Damn. Missed again. Anyway, I can’t help but believe that it is possible to overcome the team mentality if enough opinion-makers take up the fight. It all comes down to perspective – whether gays can marry or not, there will still be enough to eat. As Thomas says, we need to open our eyes to see what’s going on around us. We need only be mindful of how good we have it to put aside the pettiness and get started on a project to take America back to the days when political disputes were in the hands of the informed, to when, liberal or conservative, being American was the most important thing . You may say I’m a dreamer. But I’m not the only one.

Panamanian Economics – Corruption Versus Capitalism

I went to Panama last March on a fact-finding mission. A buddy and I had been hearing for months that there were real estate opportunities aplenty in cool areas like Bocas del Toro, Panama’s Caribbean archipelago. So we flew into Panama City (not the one with Spinnaker’s and wet t-shirt contests) and then made our way to the islands the next day.

One of the things I pay close attention to when I travel is the gap between the rich and poor. I look to see if there’s a significant middle class because I think it says a lot about the economy and the rule of law. I can say that it appeared to me that Panama City was mostly middle class, although I’ll concede that I did not see all of it. There were certainly some nice homes (well guarded, I might add), but the majority of what I saw was what you’d think of as everyday housing – not too big or nice, but not dilapidated. More importantly, the city was bustling with people tending to their “para hacer” lists. Things changed dramatically as we made our way to the coast.

Bocas del Toro is a collection of islands just south of the Costa Rican border, on the Carribean side of Panama. It is an interesting place because the main town, Bocas Town, is sheltered from the ocean by the backside of two sizable islands – it’s own and one other. There are some smaller islands in the mix, as well. The result is a place where much of the transportation is by boat, on water that is as smooth as glass. Houses and hotels are built on stilts. It’s actually one of the neatest places I’ve ever been. Alas, economically, the place is a train-wreck.

As I said, my friend and I were investigating rumors that property was dirt cheap, but on the rise as international tourism was taking off. We concluded that it was probably true. We also concluded that we’d be idiots to try and find out for sure. This is where the rule of law comes into play. You see, Panama is very friendly to foreign investment, mainly because the US is the biggest user (and therefore customer) of the Panama Canal. As a foreigner investing in Panama, you can set things up so that you don’t have to pay any taxes – not on property, not on income – for a period of ten years. If you invest in some sort of re-forestation project, ten years can become twenty. The Panamanian government has latched onto the idea, which has been well proven, that foreign capital creates local jobs. It’s the rising tide lifts all boats principle. However, the adherence to the rule of law is really the arbiter of long-term success.

In Panama City, you can see the wonders of a free market with an influx of capital – Panama City is the financial center of Central and some of South America. Though I am quite certain that corruption is present there, I am also certain that enough of the folks in power have realized that gains from malfeasance are easily dwarfed by gains from saying what you mean and meaning what you say. Essentially, the leaders in Panama City have officially become westernized. Not so in Bocas del Toro.

One of the big draws to Bocas is teak wood. Just run a google search on “bocas del toro teak wood” and see how much comes up. The offers vary, but the general theme is the same – you can pay a ludicrously low price for 10-20 acre increments of waterfront land with beaches that transition into teak forests . The teak is meant to be your nest egg – they (a crew of workers comes with the deal) harvest them every ten years or so – yielding a reportedly whopping return on investment. On top of that, these visionary developers have dedicated some of the land to harvesting the Noni plant, which, as near as I can tell, is something like Aloe but with a “it’ll cure what ails you” kind of mystique. This is harvested yearly, offering investors reliable and consistent income. So, to summarize, here’s what you get: land for cheap that is right on the water (high appreciation potential), the full rights to build whatever you like on it (vacation home or business), a farm of teak trees that will provide a windfall of cash every ten years (built-in revenue stream), and a crop of Noni plants that will pay the light bills (icing on the cake). Too good to be true? You bet.

It didn’t take much digging to conclude that the areas away from Panama City are not even remotely westernized, at least not the economic sense. They’re in a strange place, between the past “he who has the cash makes the rules” system and the future “follow the rules and create the cash” system. Corruption still holds sway over Bocas del Toro. The concept of quid pro quo has not yet really taken hold there, at least not where foreigners are concerned. To some (too many) of the locals, we are nothing more than walking money bags. Their job is to extract as much as possible from us, and there is no ethical or practical issue with saying or doing whatever it takes to make that happen. From my perspective, whether you’re renting a taxi, hiring a tourguide, or buying a teak farm, you are well served if you do not count on honesty or integrity from the locals.

We met another American who had been in Panama for much longer than we had. He had the occasion to befriend an attorney who spends half her time in Panama City and half her time in Miami. She explained to him that a very large portion of the time she spends in Panama deals with helping foreigners who’ve been scammed in real estate deals, many of which take place in Bocas Del Toro. Apparently, they have quite a slick operation set up there.

Buyers are courted and shown real, working tree farms. They’re provided access to reference customers who sing the praises of their investments. When these marks decide to pull the trigger, they are treated to a credible closing, complete with piles of legal paperwork. The thing is that the paper is worthless. The check clears and the crime is discovered only when the “new owner” tries to exercise his rights of ownership – either by building something or simply by hanging out. The Bocas authorities are called in and the person gets that sickening feeling that you get when you know you’ve been had. The police, who most likely are in on the con, rave about how this is causing all sorts of problems and how they are hot to nail these ladrones (criminals). From there, the story is just like any con movie – the victims return to the scene of the closing, only to find an empty building with no one around. The company they dealt with is gone, vanished from paradise. And the point of all this?

The situation in Panama, if we can extrapolate the Bocas situation, highlights something important about how societies handle the transition to capitalism. The thing about going from a closed market to a free market that invites foreign participation is that there is a queue for the receipt of benefits. The haves are the first in line, which means they will have more before the money trickles down to those who have nothing. This can be very disconcerting when seeing far into the future must always give way to daily necessities. So, for many rural Panamanians, the benefits of honoring contracts with foreigners have simply not yet availed themselves. In an area where there is no middle class, corruption, for most folks, is still a better business than truth. The problem is that this can only go on for so long before the whole project withers away.

Capitalism is a vacuum for money, but only if the profit motive can be realized. When money goes in and then disappears because the main rule of the game is that there are no rules, the vacuum dissipates…and fast. This is what is happening in Bocas right now. A friend visited there a couple of months ago and says that Bocas del Toro is already played out. How can that be? As recently as March, you could smell the opportunity there. There were major resorts planned on one of the biggest islands and more and more tourists were visiting and staying longer and longer. It seems, however, that one too many investors got burned by the short-sighted (although understandably pragmatic, from their point of view) actions of latino grifters on the long con. The resorts are on hold. The money well has dried up before it ever really got going. It’s sad, really…but maybe not.

Like I said, Bocas del Toro is beautiful. Though I liked the idea of buying low and selling high while the international tourist boom made landfall there, I now like the idea of being able to go back to a place that’ll be largely unchanged and still every bit as charming (don’t get me wrong, I had fun) in 10 years. And now that I know what I’m dealing with, I’ll conduct business as I do in Jamaica – product first…then the money, mon. And if I’m in a real good mood, I might just finish off the transaction with my favorite Spanish phrase: “Donde tu frijole playa?” (That one, you’ll have to look up.)

Scandinavian Economic Prosperity and Merits of the Welfare State

I was listening to the Michael Medved radio show today (He’s really good, by the way.). The topic was Scandinavian family values, or rather the lack thereof. He was referring to a USA Today article that talks about how 82% of Nordic children are born to unwed mothers. Though it is somewhat shocking to think that an entire culture has embraced such a backwards mentality as to consider marriage more deliberately than bearing children, it appears to be so. A couple cited in the article is expecting a baby in May but they’ve decided to put off marriage until they’re sure they’re right for each other. Say what? Aside from the differences in religious and social attitudes in Scandinavia, there appears to be an economic explanation for this practice.

According to a caller from Copenhagen (you gotta love internet radio), the Danish system rewards having children before you get married – government benefits are substantially higher for single mothers than they are for married parents. Putting aside that this is obviously stupid, I think it illuminates something more important about the relationship between economic policy and social attitudes. But first, it’s time to put to rest the myth that the Nordic system is the pinnacle of compassionate and effective economic policy.

Scandinavia is often held to be an example of a successful welfare state, where taxes are high but benefits are high and much appreciated by a population more happy with the return on their substantial investments. On the surface, given the prosperity of these three countries, this argument seems compelling. It seems to refute the notion that the kind of economic freedom reflected in free-market capitalism (and its necessarily minimalistic welfare model) is a prerequisite for truly elevating the human condition. However, I am inclined to believe that it is the social pressures that exist in such ethnically homogenous populations that explain the success of the massively regulated and redistributive economies in Scandinavia.

The problem for free market fans like myself when considering this area of the world has always been reconciling the notion that there is no free lunch with the fact that Sweden, Norway, and Denmark have in years past enjoyed very low unemployment and a commendable general standard of living. How could such generous benefits be sustained economically? Why wouldn’t the freeloaders bankrupt the system? The answers, until the last decade or so, have revolved around the fact that freeloading among Scandinavians was socially unacceptable. The folks who could work did work because the social repercussions of being a deadbeat sponging off the system were more painful than whatever agony was associated with maintaining gainful employment. Social responsibility effectively protected the system. Therefore, the security of comprehensive state-provided benefits could be enjoyed by all without fostering resentment toward a significant portion of the population for taking without contributing. Nowadays, however, the Scandinavian welfare state is in a crisis, and immigration is turning out to be the chief culprit.

I found an article on the Royal Danish Ministry of Foreign Affairs website called “Denmark – Conditions of Life – The Scandinavian Welfare Model.” The author, Niels Ploug, describes the situation:

It has never been the intention either with unemployment, sickness benefits or with cash benefits that so many people should receive them or that they should receive them for so long as has been the case in recent years. The financing of the welfare state has thus become a problem, and as it has not been politically possible to increase taxes, which are already very high, the Scandinavian countries have accrued a very large national debt which on the long view could represent a threat to the welfare systems.

The reason so many are receiving benefits is the influx in the last few years of immigrants. The Scandinavian systems were designed to provide benefits to all residents. Prior to the immigration stampede, this was viable because the ratio of people contributing to the system (via high taxes) versus people extracting benefits from the system was high enough to sustain it. However, now that immigrants are moving in and realizing that they can live in relative luxury (compared to life back home) without so much as lifting a finger, the system is descending into deeper and deeper waters. Thus, the free market fan is vindicated.

Whenever income distribution is derided by classical liberals (not to be confused with the modern-day notions of liberalism), the misguidedly compassionate are quick to point to Scandinavia as an example of the realization of their vision. It is the harshness of capitalism, they argue, that creates poverty and crime. If we only adopted the redistributive policies of our Nordic friends, many of our problems would go away. This, as we can now see, is nonsense.

The fact is that there is no ethnic homogeneity in this country to protect us against freeloaders. Our society is so anonymous that it is entirely possible to remain unemployed and receive unemployment and welfare benefits without any “neighbors” ever knowing – especially now that food stamps are giving way to benefit cards that are often indistinguishable from debit and credit cards. So there are no real social incentives to be productive. We can see how a relatively small population of immigrants with no ethnic connection or feeling of social responsibility are bankrupting the Scandinavian system. Imagine implementing that system here. It would make the inane US social security system look like the height of economic acumen. And, beyond simple economics, as in the case of single mothers in Nordic countries, there are significant social ramifications to such systems.

As the caller from Denmark pointed out, there’s a definite connection between the terms of the provision of benefits and the behavior of the general public. It simply makes sense economically to have a child before you get married. According the Ploug article, about two-thirds of single mothers in Sweden receive housing allowances, which means that available benefits are being taken advantage of in a big way. And why not? If you and your partner are blissfully in love and want to have a child, you’ll receive significantly more income from the state if you do so while unmarried. Could it be that much of the rationalization for this practice (liberal attitudes about the sanctity of marriage, etc.) is a smoke-screen for the fact that people will often do what makes the most sense economically? This has certainly been the case in the US.

When Welfare Reform was passed in 1996 limiting the amount of time benefits could be received, the US saw a gradual reduction in the number of people on the welfare rolls. When there was no economic incentive to get to work, many welfare recipients were content with limiting their exertions to walking to the mailbox every month to collect a check from Uncle Sam. But when the money ran out, necessity forced them into the workplace. So, when we look at Scandinavia, we should not see a shining example of how things ought to be. We should see the massive impact that economic policies have on the prosperity of nations and on the value systems embraced by the populations therein. It is, quite simply, an axiom that large-scale income redistribution inevitably leads to a decline in fiscal health. What is also becoming more and more clear, however, is that attitudes regarding employment, family life, and the relationship between the rich and poor are disproportionally influenced by economic policies in the welfare state. This is an object lesson in the concept of unintended consequences.

Social attitudes should be shaped by the public’s rational pursuit of the good life. But when economic policies place arbitrary hurdles in the way of practical courses of action, impractical and often irrational options become the paths of least resistance. Over time, they become socially acceptable simply by virtue of being well worn. The problem is that, eventually, these paths place the good life entirely out of reach. As far as I’m concerned, it’s better to let necessity continue to be the mother of invention. What do you want to bet she’s married?