Friday, November 11

Cargo Cult Economics 6 - Sachs & Violence

One of the best blogs for economics, development and common sense is Econ Log, which quotes Jeffrey Sachs, one of Ethiopia's dictator's biggest supporters.
[S]ocialist and SLI [state-led industrialization] policies should be understood mainly as "policy experiments" (albeit enormously mistaken and costly ones), rather than as inevitable consequences of the economic structures of the countries in question.
That sounds like a perfect explanation for economic failures throughout Africa and the world as well as Ethiopia in particular for the past thirty or so years. Socialist experiments have been carried out on literally billions with mass impoverishment and oppression as the natural results.

For example, no country has ever prospered and founded democracy without private ownership of land which Ethiopia does not have and which is rooted in Marxist - Leninist - Socialism. Alas, Professor Sachs has changed his tune recently.
The standard diagnosis is that Africa is suffering from a governance crisis. With highly visible examples of profoundly poor governance, for example in Zimbabwe, and widespread war and violence, as in Angola, the Democratic Republic of the Congo, Liberia, Sierra Leone, and Sudan, the impression of a continent-wide governance crisis is understandable. Yet it is wrong.
You see! Presto! Ten years on, governments, particularly African ones are suddenly no longer responsible for good policies and governance. This was about the time that the Professor came out with the Millenial Development Goals whose basic premise is that if hundreds of billions are invested in poor nations they will become rich even if they are poorly governed. Indeed, corruption does not even matter.

From an interview with Professor Sachs:
Q: There's a sort of chicken and egg argument that goes on about whether you should put the money in or whether you should get the transparency, the decent government in first. You're on the side of the first are you, of putting the money in first?

JEFFREY SACHS: To an extent.

There are places where I would not put a lot of money in and Eritrea's one of them right now and Zimbabwe's one of them. I make distinctions.

But I'm working in Senegal, in Mali, in Ghana, in Nigeria, in Ethiopia, in Kenya, in Tanzania, in Uganda, in Rwanda, in Malawi. Every one of those places is beset by huge problems. Everyone is beset by huge suffering and extreme poverty. But every one of them has a government that one could work with to solve practical problems.

Q: Given history, there's probably quite a high likelihood that in at least one of those countries, some minister or ministers are diverting some of the money that should be going to the poor and putting it in Swiss bank accounts or whatever. What do you do about that, how do you face up to that and does it… do you go ahead regardless of that?

JEFFREY SACHS: First of all, that's also happening in my country, the United States. There's a lot of corruption in the United States. Money politics greases the wheels. It's appalling how money, business and politics are now just running wild in Washington. The cronyism, the corruption and so forth so the idea that somehow you know the rich countries are pure and the poor countries are evil is a myth that the rich like to tell about themselves.

I'm all for fighting corruption but if corruption were fought first in Asia and nothing else were done, you would have lost the greatest economic development on the planet. I'm not for corruption, I just want to be understood.

But this idea that corruption is the beginning and the end of the economic story and that well-performing countries are not corrupt, poorly performing countries are corrupt and it's as simple as that, and that Africa's problem is corruption is just naivete to the highest extent.

I don't want anyone saying I'm soft on corruption, don't care and so forth, that's ridiculous.

What I am saying is that this idea that you can diagnose a whole set of complex problems of hunger, disease, impoverishment, lack of infrastructure and chalk it up to corruption is a preposterous stereotype perpetrated by a lot of people that don't know any better because they sit in their offices in Washington or wherever and they make up theories.
Unbelievable! Ignore the soft disclaimers like only 'to an extent' thinking money is more important than policies or protestations about 'not being soft on corruption'. What Professor Sachs is saying loud and clear is that good governance simply does not matter. As we shall see below that particularly goes for Ethiopia.

In How Asian dictatorships differ from African ones, Newmark's Door quotes Prospect Magazine to refute the Sachs point clearly.
The reason that—South Africa apart—sub-Saharan Africa has not developed is that it has not been in the interests of the controlling elites to develop it. In contrast to the "developmental states" of Asia—such as South Korea and Taiwan—which grew rich in the 1970s and 1980s by educating their populations and investing in export industries, Lockwood calls Africa's states anti-developmental, arguing that they actively discourage business, trade and innovation.

In Asia, the rulers, often military men or one-party-state dictators just as in Africa, had a sense of national purpose, and the state broadly functioned for the public good. In Africa, the rulers captured the state, its institutions and sources of wealth, and kept it for themselves. They used it not to generate national wealth, but as sources of patronage to reward followers.
There is a joke about this:
two schoolmates from the London School of Economics visit eachother years after graduation. The African visits his Asian friend first and marvels at how prosperous he has become. The Asian shows him a highway in the distance and says he got a 10% cut of the funds.

Some years later the Asian comes to Africa and finds that his buddy is wealthy beyond imagination. The African shows him a field of rocks and says he got 100% of the highway funds.
Corruption matters. Professor Sachs is certainly an intelligent man but there is no necessary relationship between intelligence and being right or even intelligence and common sense. In addition, comparing corruption in the US to countries like Zimbabwe and Ethiopia is like chewing on filet mignon in front of a starving man and consoling oneself by noting that it is just a bit overcooked.

We heard similiar bits of pseudo-comradely comments masking acid contempt from Jimmy Carter comparing the Ethiopian election to the 2000 election outcome in Florida even though he agreed with the very critical EU report in every particular. Why? Well he was already buddies with
[Meles who] would meet me at airports in Paris, Atlanta, and London when I came into the region, spread his war maps on the floor, and describe his progress against Mengistu's forces.
It seems that many such observers get a thrill of sorts out of being in the presence of a real life rebels turned heads of state. A little naughty progressive thought and reflected admiration probably worked wonders on the former President as well who went on to threaten Eritrea on his buddy's behalf.

Former American Ambassador Brazael in her goodbye speech compared her displeasure over the election of President Bush to the Ethiopian opposition's electoral victory in the same condescending manner. Something about how the ignorant American masses voted against their own interests that she so clearly understood on their behalf because she had been part of the 60s generation and read Toni Morrisson.

We've read and loved Toni Morrisson's books too but don't remember anything about coddling despots there. We're a bit young for a sense of enduring romance with the 60s but seem to remember that the meaning of that era had something to do with giving oppressed people political and economic rights - just the kind Ethiopians want today and the Ethiopian diaspora want for them.

Ambassador Brazael certainly deserves thanks for helping to prevent the mass killings of the Anuak by the Ethiopian government. However, it would be equally inappropriate in the future for someone who happened to be a young adult in the 80s and who cherished the Reagan Revolution to attack a possible future President Hillary Clinton's legitimacy while making excuses for any convenient dictator / ally of the moment.

What all of the above have in common is incredibly low expectations for and of wretched Ethiopia and Ethiopians. The natives are just expected to accept pats on the head for playing so nicely at the development and democracy game before they settle down to the real business of not provoking their corrupt dictators into treating them even worse.

More recent comments from the American Embassy about how protestors somehow invited the government to shoot them down just to score political points and ruin everyone's day up on Entoto Road is in the same vein. Indeed, every call from the US or the EU for 'both the opposition and the government' to refrain from violence and to respect the constitution are also absurd.

One must wonder why the protestors in Uzbekistan or those in the Ukraine were not treated so poorly by the West - or how about protestors in Jim Crow Mississippi, Apartheid South Africa, East Germans at the Berlin Wall or Chinese at Tianemen Square. Weren't they just provoking authority too just like Ethiopians?

Principally, Sachs & the Embassy & Brussels & Washington expect no better. They think that they have finally found an 'African they can talk to' in the form of Meles.

They know very well how poorly Ethiopians are doing in the present and how dark their future must be but figure it will all be a problem down the line for a different set of academics, international bureaucrats and governments - long after the short term interests of not just today,but just one hour at a time are served.

Readers may find it odd to find an academic lumped in with realpolitik politicians but but they can be every bit as cynical and selfish in pursuit of their ideas which evidently matter to them far more than people and human reality ever could.

Weichegud quotes Professor Sachs in praise of Ethiopia's dictator
Prime Minister, you have distinguished yourself as a one of our World’s most brilliant leaders. I have often said that our many hours of discussion together are among the most scintillating that I have spent on the topics of economic development.

I invariably leave our meetings enriched, informed, and encouraged about Ethiopia’s prospects. Moreover, I know fully that you are deeply committed to peace, development, and the success of your country.
This statement is so far beyond absurd it is embarassing. What Professor Sachs is actually doing is thanking Meles for the chance to carry out social and economic experiments on Ethiopians.

At some point academics who feel above the world of politics just want to MATTER and MAKE A DIFFERENCE so badly that they will jump at chances to show up all of those crass politicians at DOING GOOD so that the world will sit up and notice and make them IMPORTANT.

Literally ideas and theories become more important than human beings. The world has known for most of a century that the most basic policies of the Meles regime will lead to nothing but disaster. That is why the Professor would never be allowed to try this nonsense out on folks in Bavaria or Ohio.

Politicians are bad enough but what poor folk really don't need is one more influential person who really wants to help while going against the most basic common sense and experienced acquired by humanity at such cost.

So back to the title of this post- Sachs & Violence. Like sex & violence in popular entertainment, the dictatorship of Meles is inseperable from the support of otherwise absolutely decent people like Professor Sachs. In bureacracies and think tanks and international organizations everyhwere people seem to lose touch with morality and common sense when they have (to them anyway) a neat little problem that they can apply their pet theory or very short term strategic calculation on.

They just seem to get an itch to just 'try out and idea' every now and then at the expense of relatively rich taxpayers who instinctively know it is all nonsense and poor folks who just need a healthy dose of good old fashioned capitalism and liberal democracy to do just fine and to no longer need aid.

Anyone anywhere who says different is really saying that they don't want Ethiopians to have the very same opportunities that have let billions of lives on planet earth escape 'poor nasty brutish and short' fates in the span of even a generation.

It is that simple.


The first parts of the Cargo Cult Economics Series and the total silliness behind the Millenial Development goals are listed below.

  • Cargo Cult Economics
  • Pretense of freedom and a free market is alive and well in Ethiopia with absolutely no attention given to the institutions and accountability necessary for free and prosperous nations. The whole edifice of the massive money transfer to Swiss banks (aka MDGs) is like the Pacific Cargo Cults based on the idea that prosperity comes from rituals.

  • Cargo Cult Economics 2 - All About the Benjamins?
  • Development is about more than cash - it is about institutions. In fact any money in the absence of reason and rationality will hurt more than help by breeding corruption and the destruction of needed institutions.

  • Cargo Cult Economics 3 - Structural Corruption
  • Corrupt and unaccountable party and government owned businesses and monopoly service providers in an effectively single party state do not provide a setting where you can expect freedom and prosperity or accountability.

  • Cargo Cult Economics 4 - Short Term Memory
  • Recent African history from the era of independence in the late 50s and 60s on is full of the serial discovery of visionary rennaissance leaders that the world has fallen in love but whose policies have only bought tragedy for their people.

  • Cargo Cult Economics 5 - Cheerleaders
  • Intellectuals and academics who give cover and encouragement to third world despots and their bound to fail economic schemes imagine that it is OK for some to live under different rules than they would expect for themselves. That is an example of the vile sentiment of actual romance and purpose that is found by some in other people's suffering.


  • Economic Absurdities
  • , details how all accounts of Ethiopia's economic performance must not be considered at face value and that the economy is in fact a stagnant mess utterly dependent of foreign aid and remittances.


  • The Historic Elections of May 2005
  • , looks at the 'election' season and EU & US policy in terms of quotes revealing rhetoric and reality.

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