Saturday, February 12

Cognitive Dissonance

On Ethio-American Investment in Ethiopia an official says that
[h]e wanted to see Ethiopians come back to invest for the greater good for the country, because they want to help Ethiopia develop a sustainable economy.

His experience, however, has been one of Ethiopian Americans asking for special favors when considering investing or coming back expecting special treatment for the government.

He sees these investors as interested in financial gain rather than the good of Ethiopia.
Hello! The whole idea of a market economy, classical liberalism, capitalism, competition and investment that has made some of the world free and prosperous or on its way to being so is based upon financial gain ... the shared opportunity for all to seek their own totally and utterly selfish financial gain.

In normal economies the common good is defined by millions of free and necessarily selfish individual decisions that cause the best to rise up and the worst to fall. It is the genuine democracy of the marketplace that does so well everywhere at creating prosperity and laying the groundwork for the rise of the bourgeoise and political freedom and all of that other good stuff ... given limited government intrusion.

If government wants to define the common good by the willingness of investors to lose money and waste time while being comforted by a sense of national duty - then there will never be meaningful investment or willing risks taken.

Certainly, choosing where to invest can rationally be based in part on emotion and familiarity, but without a sea change in the most basic Ethioian economic philosophy, Foreign Direct Investment will remain at about a tiny $ 70 million a year on average ... and much of that comes from just one person.

The government also seeks to determine whether investors in Ethiopia are 'rent seekers' or 'development investors' before welcoming them. Perhaps that means they are not willing to lose money and put up with bureaucracy or whether they just have a secret desire to be poor. One must seriously wonder if 'proto-kulaks' are not welcome to invest in the agricultural sector.

What is a 'sustainable economy' anyway, and what is wrong with 'rent seekers'? These disposable post-modern and revolutionary catch phrases are essentially meaningless and actually quite silly. One never hears such language spoken in developed and developing economies where money is actually being made and development is really taking place.

That is the vocabulary of folks writing weighty policy papers and speaking at academic conferences. All of the foreigners who play with these words then go home to live very well and to invest and live in the very bosom of their own rapacious 'unsustainable rent seeking' systems while Ethiopians are stuck with the consequences of those ideas.

All of this is certainly not inspiring for potential investors, who after all want to use their hard earned money ... to make more money.

And you know what happens when money meets new money in a friendly place ... they just get right down to making even more money and building lots of stuff.

Pretty soon more money comes over because it feels really welcome and so on and so on ... before you know it everybody has more money.

You can get money to behave properly and you have to protect money too. But try and tell money what to do or where to go and it will stay away or run away ... so all but a few stay poor.

This phenomenon is also known as the free market.

<< Home