Tim Worstall linked up this most excellent article by Brad DeLong that very nicely explains why free trade is the real solution to global poverty, and how the left's quest for "fairness" and distaste for "exploitation" merely propagate what they want to stop:
Seth Stevenson thinks that those who do not buy the coir mats are morally superior to Debbie and the rest of us: they are not complicit in the exploitation of Third World labor. But there is another way of looking at it ... Suppose that Seth Stevenson, on his bicycle ride, were to stop by a couple of empty huts, run into them, steal the looms, and then smash their looms to pieces on the beach and dance in front of the resulting bonfire. Then the villagers could no longer make coir mats. They would have to find something else to do--something else that is worse than making mats. Such a theft-and-bonfire would have the same effect on the people of Desperately Poor Village as... as... drying up demand for their products by urging First World consumers to adopt a higher standard of morality and eschew the products of Third World labor, no?
One of the biggest problems I have with the traditional liberal agenda regarding economics is their quixotic quest for that ever-elusive "fairness". It's not "fair" a peasant in India makes less than an autoworker in Detroit. It's not "fair" Bill Gates is worth billions of dollars while a mother of four with an eighth grade education can't find a job. It's not "fair" someone gets paid $3 a week to make doormats that I pay $26.99 for.
To which I can only reply, "what is fair?" How can someone, anyone sitting in their own air-conditioned home instant messaging their friend in California on their own computer while watching their brand-new plasma TV determine what is or is not fair for an Indian peasant in Kerala? How can any politician sitting in his office on Capitol Hill surrounded by pretty, well-scrubbed staffers hope to untangle the forces and incentives that created a single mother of four with no education? How can anyone so utterly ignorant of the spectacularly different conditions of each single person living in poverty think they can help create legislation to fix all of them?
They can't. I can't. You can't. The only people who can are the people themselves. The worker knows how much their labor is worth to them, and the employer knows how much they will be able to pay for that labor. Both base their calculations on hundreds of variables, and in a competitive market most of those (on both sides) will be secret. Do-gooder outsiders with little or no understanding of basic economics, let alone the unique stories behind each and every person in a village, can't even be trusted not to offend anyone, let alone offer any real help.
It's so baldly obvious it's no wonder technocrats and stasists do their best to ignore it: In a country with free markets, stable governments, evenly enforced rules of law, in which information is allowed to flow freely, exploitation is impossible.
A peasant works for 50 cents a day because he knows it only costs 25 cents a day for him to live. An educated peasant also knows to save that extra 25 cents a day, and will do so because his stable government won't take it away or murder him to get it. That same peasant can then one day use his savings to open a store selling mats, secure in the knowledge his landlord will be prevented from arbitrarily raising his rent because of his secure contract. This now successful businessman then learns through his newspaper that there is high demand for mats in the next province, and opens another store there, and then another, and then another. The peasant is now a wealthy man, even though at one point he was being "exploited" making a mere 50 cents a day.
Once we accept this axiom for the truth that it is, our policies change. Create incentives for people to use their own knowledge to succeed. Work for consistent and understandable laws, and try to make sure they're enforced evenly so that people aren't holding the hand of someone who's holding them down. Allow the free flow of information, capital, people, and ideas so that they can learn about opportunities and move wherever they may be. Educate them well so that they'll recognize those opportunities when they come.
All of which is, of course, anathema to the technocratic left. People are poor because they are exploited, and only by taking money from those who have made it and giving it to those who didn't can we right the situation. Jobs are lost because greedy corporations wish only to maximize their profits, and only by protecting these businesses from even greedier foreign competitors can the situation be salvaged. Laws are used to oppress the common man, and only by disrupting them through "empowerment" and endless lawsuits can wrongs be righted.
Common sense, of course. Unfortunately utterly wrong as well. Like energy maneuvers in air combat, to really succeed in providing prosperity we must sometimes do things that point the nose away from the target. Trust people, give them the tools to figure it out amongst themselves, and provide the opportunity for them to do so, and prosperity will happen faster than you can possibly imagine. Try to control them, to force them to fit into your idea of fairness, and you will create people who depend on your fairness just to survive. Prosperity becomes something that must be taken, not shared.
Which is, I suppose, what most political leaders want... an appreciating constituency completely dependent on the largess of their leader. It even works, as long as the leader is wise, never makes a mistake, and never dies. For myself, I don't want to be dependent on anyone. I should be allowed to succeed or fail by my own devices, and reap the rewards of my success without them being taken from me, and deal with the consequences of my failure without them being "cushioned" for me at someone else's expense.
I donít want to rely on anyone but myself. Why does anyone want anything else?