Two weeks ago I watched the invincible Roger Federer win the Wimbledon Championship for the third consecutive time. That same weekend, there was a massive concert in Hyde Park where people rocked and raved to make poverty history. On Wednesday we were informed that London has won the bid to host the 2012 Olympic Games. On Thursday morning, London was under terrorist attacks. What next? The following are my thoughts on the three events that occurred last week (so I am excluding the Wimbledon Championship).
Make Poverty History
Make Poverty History is a slogan that seems to be ubiquitous in Britain. It is a campaign headed by charity organisations as well as celebrities, notably Bob Geldof and Bono of U2, to make poverty in Africa a thing of history. By holding massive concerts around the world, the campaign would raise awareness of what is going on in that continent. As the G8 summit was due to be held, campaigners wanted Tony Blair & Co (the so-called "eight most powerful men in the world") to do something to eradicate poverty. The campaigners demanded trade justice, debt cancellation and aid. I agree that the poverty-stricken region must be saved. But what the campaigners demand is not the way forward and is likely to worsen the situation.
The website above portrays the argument typically submitted by "humanitarian" socialists who blame poverty on capitalism and trade. To cite a few sentences to encapsulate their ideas:
"[Trade rules] are rigged in favour of the wealthiest countries and their business interests"
"So no matter how hard people work in the developing world, or how much their countries produce, trade relationships benefit the rich world most."
And the most astonishing of all: "While paying lip-services to fairness, the richest countries, with their almost limitless resources, steer decision-making in their interests." I never realised that the richest countries had almost limitless resources! Are some of us living beyond scarcity? Wow, I had no idea!
"Governments are losing control of basic public services, as they're snapped up by profit-hungry investors. And workforces are being cynically plundered for cheap labour by powerful, under-regulated transnational companies, leaving thousands open to abuse and exploitation."
"Poverty will not be eradicated without an immediate and major increase in international aid."
By now, you get the picture. I understand that seeing people dying of hunger while others live in luxury can be infuriating. But redistribution will not eradicate poverty. The campaigners' argument is based on an assumption that production takes place in one part of the world ("rich countries") and it should be transferred to another ("poor countries"), hence the idea of distribution. Yet this is flawed. As Henry Hazlitt put it, "production, distribution, and consumption all go on continuously and concurrently" [Hazlitt, 1973; 57]. Therefore free trade, not regulated trade which distorts the market, should be encouraged so the poor can produce, distribute, and consume at the same time in a sustainable manner.
Many people either have short-term memory or simply are unaware of how the world was only fifty years ago. Now rich countries in Europe and Asia were desperately poor then. Johan Norberg notes that in 1964, Zambia was almost twice as wealthy as South Korea but today South Korea has almost a European standard of living and is roughly 27 times wealthier than Zambia [Norberg, 2002; 93]. This is not due to a massive aid package but to trade, albeit state intervention. People may argue, "Okay, maybe aid is bad but state intervention must be adopted to achieve trade justice." Pardon my ignorance but I do not understand what is meant by the term u2018trade justice' as put forward by the campaigners. Doesn't it mean that trade should benefit both parties who engage in it? The campaigners say that rich countries and trade organisations are forcing poor countries to open up their markets to foreign imports in the name of u2018liberalisation', u2018free trade' or leaving things to market forces and this is unjust. So what are they calling for? That poor countries should become autarkies? That they must close their borders and depend on aid? That rich countries must stop producing and only consume what is produced by poor countries? What is the argument here? What we currently have is not free trade but interventionism. Governments and trade organisations already regulate trade. So what the campaigners want is that the regulation work in favour of poor countries. I am sorry but I do not see how shifting the focus of favouritism from one group to another can be all that fair. How about no favouritism at all? That seems fair, doesn't it? If there was no special treatment, people would try so hard to make themselves attractive to investors. Why try when the rules clearly favour some?
One thing that bothers me immensely is presidents and prime ministers pledging aid packages as if that money comes out of their own pockets. For instance Tony Blair seems to think that what is produced in Britain belongs to him and that he can promise these countries billions of pounds without seeking tax payers' approval. And giving in to pressure groups is praised as a noble thing to do. I would never object if Blair, Geldof and Bono wished to spend their own money to help someone out of poverty because it is their property and they can do what they like with it. However, there is a word for giving away something that belongs to others without the owners' permission – theft.
Geldof & Co said, "The people have spoken but the politicians have not listened." Again, who are the "people"? There are a huge number of people who are quiet. Thus "people" here can only mean "those who are loud." It must be inconceivable to Geldof & Co that there are folks who actually disagree with them.
The 2012 Olympic Games
Paris, London, New York, Madrid and Moscow were bidders to host the 2012 Olympic Games. Paris was a clear favourite for a long time. Nonetheless, to many people's surprise, London won the bid. Can you imagine the honour of holding the greatest show on Earth here in London? People were shedding tears of joy in Trafalgar Square! This will give hope to children who are the future, will rejuvenate areas in a sorry state and businesses will thrive. Indeed, this is what it says on the official London 2012 website (www.london2012.org):
"When all the sums have been done we would be better off than before…Businesses in London would be looking after 17,000 athletes and officials, more than 20,000 journalists and broadcasters, plus hundreds of thousands of spectators, all of whom would need food, drink and a place to sleep for the duration. Clothing for 50,000 volunteers has to be manufactured and the merchandise has to be designed, produced and sold to millions of visitors."
So hosting the Games for two weeks will save the people involved in the project who would otherwise have nothing to do? Please remember, this show is on stage for two weeks! After the athletes, officials, journalists and broadcasters leave the city, what are we going to do? Will the Mayor of London, Ken Livingston, constantly employ actors to keep the show going and to sustain the effect? A not-so-surprising thing is that it is easy to find articles on how the Games will benefit London but not easy to find out exactly how they will be paid for. The cost is likely to be 4 billion pounds plus and like many public projects, it will go over budget. The Greeks and the Australians are still paying for their Games and the maintenance of the venues alone is expensive.
London 2012 is to be financed by a new lottery game, a compulsory annual council tax which will increase, and by income from marketing deals, sponsorship, ticket sales, and the London Development Agency. Ken Livingston apparently has promised that the costs will be controlled. So if they go over budget, is he going to pay the extra cost himself? Oh no, Gordon Brown, the Chancellor, will come to the rescue. He has guaranteed that the UK Government will be the ultimate financial guarantor should there be a shortfall between Olympic costs and revenues. Again, the UK Government money comes from the UK population! People may say that I am obsessed with costs and cannot see the good the Games will do to the community. However, I believe that being otherwise is irresponsible. Okay, the Games will be good for the children of London: Not only will they be inspired by sporting heroes but also, will learn a lesson that if you want something, you have to pay for it, for they will be the ones with the burden of the cost in the future.
Londoners are still in shock from this atrocity. Only a day before the attacks, as mentioned above, people were jumping with joy over winning the bid. The next day, a completely different picture. Bombs exploded in London Underground and on a bus. That is despicable. Commuters have been so calm and it seems that our stoicism is shining through. I hope that people carry on as they have done so far and more importantly that the government does not restrict the freedom of civilians (a naïve thought). The House of Commons has passed a bill to introduce national identity cards as a security measure. I hope the events on 7th July will not convince the government to implement them, for a clear identity of a person has nothing to do with what the person is capable of.
July 14, 2005