This is one of those books that comes so close to getting it right all the way along, and in truth actually does get it right, but not always for the expressed reasons. The reader has to consider the author and the probable intended audience. The author, William Easterly, is a former World Bank research economist; his target should be people similar to himself and those currently in academia. Why else write a book criticizing the global top-down foreign aid/anti-poverty groups (governmental, corporate, or otherwise) if not to target that audience?
Two author comparisons come to mind: Joseph Stiglitz and Thomas Friedman.
Stiglitz is also an ex-World Bank functionary, in a higher position but not there for the same duration. His writing Globalization and its Discontents (W.W. Norton, 2003) is a much more aggressive and hard –hitting work calling for a full reform of the World Bank and the IMF as they are root causes of many of the world’s economic, social, and political problem (they are obviously all inter-related). He arrives at the same conclusion as Easterly, saying “The result [of globalization of the Washington Consensus] for many people has been poverty and for many countries social and political chaos. The IMF has made mistakes in all the areas it has been involved in.”
The comparison to Friedman is more stylistic. Easterly uses personal anecdotes from his many travels around the world and uses analogies to emphasize certain points, but the analogies tend to be “too cute” and are readily overcome with faults if the reader tries to extend them much further than the initial application. Fortunately for Easterly, he does not fit into Friedman’s grand rhetoric of exceptionalism that supports the American empire in all its endeavours. However, there is a continual battle within Easterly himself of not quite wanting to give up on his long years as an avowed “democrat” and “free marketeer”.
The last two points, free markets and democracy are not something I am against - democracy is great, fair markets are, well more fair - but Easterly does not quite get around to defining them directly, but only indirectly through his examples, and his examples do not always fit into the World Bank apron strings that he cannot quite relinquish. The text assumes the reader knows what democracy is. The text also assumes the reader understands free markets and its global complexities in comparison to local free markets. That of course might be appropriate for his audience, but also might presume more awareness than actually exists. Throughout, there is an implicit understanding that democracy equals free markets equals capitalism.
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Interestingly enough when discussing “democracy” he consistently says that aid organizations should “ask the people”, respond to what the local people in local situations are interested in, and be accountable to the local people where the aid is targeted. That is truly democracy, and he seldom mentions voting, and he never describes government level political structures, but always, and thankfully, unerringly, returns to the “people” - for such is democracy – people power. All his concerns about democracy relate back to the “free market”, but again his examples give an implicit definition that “free markets” are not all that free, and all the examples again come from localized situations. He briefly, from time to time, touches also on consumer needs, never really looking at what a consumer needs (food, water, shelter, clothing, health) and what his created wants are through advertising propaganda. There is no mention of the burdens that an overly consumptive society, demanding wealth in the form of goods, services, and financing from across the globe, might have on other less powerful, less developed countries.
But the local markets are not free as he indicates, with clan, business, family, and resource affiliations among others that provide restraints on the freedom of trade. The ultimate irony of his writing is his argument that free markets cannot just exist willy-nilly but need to have rules for their proper operation, ultimately then denying them the adjective “free”. There are few arguments on the international scale that are used to support free market arguments – perhaps because there are no truly free markets, but a huge set of rules based on the economic good of the corporations and wealthy elite who ultimately control the government beyond the power of the voter. Of those examples that are used, many had large government interventions to protect their own developing industries (South Korea, Japan), several of them are not democracies (Singapore has made it into the “developed world”), and most have had histories of outside intervention that limited their democracy and freedom of marketing (Japan’s Diet and the influence of the samurai business class in the keiretsu precludes free markets and democracy in Japan, supported with several dozen American military bases).
Returning to the idea of “asking the people” is where Easterly cannot quite let go of his World Bank apron strings. Never is the word “socialism” even mentioned in the book, although the vast majority of his examples of how to have a successful aid program return to the people and their needs. That part is democracy, and a social democracy, not a capitalist one (an oxymoron anyway, as capitalism breeds the poverty it needs to create the cheap labour and cheap resources for the wealth of the power elites).
His solutions include education, more education, and then some more. Certainly he argues other points, and mostly other points, as to how to reach the masses of poor, but social services money spent in some way to support education (aid to mothers to help keep their kids in school as tried successfully in Mexico) always seems to be at the base of the success. That includes the success stories of former poverty stricken people heading abroad to receive higher degrees in education (most anecdotal examples relating to the U.S.) then returning to their native countries to establish a learning centre or a business. But even business when it is the emphasis of the anecdote invariably includes the establishment of some form of schooling to help improve the local conditions.
Yes, that is my bias and also my interpretation, but I think it would be difficult for Easterly to dispute it. Education (especially for women) has a strong co-relation with all other factors that determine a healthy society, such as infant mortality, life expectancy, income gaps, disease rates, and birth rates. Easterly’s main method of evaluating success always returns to the GDP per capita, yet that statistic can be hugely misleading. Sure, there are many more billionaires and millionaires around the world, but the numbers still living in poverty are huge, and by some sources have increased under World Bank/IMF ministrations (in particular see, Grandin, Empire’s Workshop, Henry Holt & Company, 2006; also see Stiglitz, Chomsky, Amy Chua, and Walden Bello)). For every billionaire there are hundreds of thousands that can live in poverty, yet the GDP per capita can still look quite comfortable in terms of poverty definitions.
Easterly uses statistics quite significantly in arguing his point, and that – apart from the GDP mis-direction – is his strongest supporting suit. All the statistics he looks at for the aid agencies indicate that, whatever his rhetorical arguments, the IMF and World bank and other aid agencies, whether government sponsored or independents, have failed across the board with their attempts at assistance.
For all his arguments, and all his statistics, Easterly does finally arrive at a conclusion that many around the globe have known for a while: intervention does not work, either economically or militarily. We need to ask the people themselves what would help them the most and deliver on those requests. Beyond what Easterly proposes as suggestions to improve aid (a touch of top down bureaucratese sneaking back into his arguments) I think we could expect an answer that the IMF and World Bank as currently constituted could not provide. What those answers are I have no true idea (my educational statistic most likely would not appear before food and shelter), only guesses. Let’s ask the people.
Jim Miles is a Canadian educator and a regular contributor/columnist of opinion pieces and book reviews to Palestine Chronicles. His interest in this topic stems originally from an environmental perspective, which encompasses the militarization and economic subjugation of the global community and its commodification by corporate governance and by the American government.
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