31 March 2015

Nelson Mandela was wrong about poverty


“Like slavery and apartheid,” Nelson Mandela told 20,000 people in Trafalgar Square ten years ago, “poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings.”

They were inspiring words, and the crowd duly went wild. But the old man was talking utter, unadulterated bilge. Poverty is not “man-made”: it is the primordial condition of all living organisms, including humans. It is wealth that is “man-made”.

Perhaps 100,000 years ago, our distant fathers hit on the idea that, instead of having to do everything themselves, they could specialise and exchange. If Ug is particularly deft at making flint weapons, let him stay behind and concentrate on what he’s good at while the rest of the tribe hunts and brings him a share of the meat. While we’re about it, Og from the neighbouring clan has a rare gift for making fishhooks: why not trade some of them for Ug’s flints?

From that simple discovery came, in due course, wheels and printing presses and spinning jennies and skyscrapers and antibiotics and the Internet. The greater the number of people drawn into a commercial nexus, the more each individual can concentrate on improving his or her particular métier. The hours which we need to work in order to support ourselves fall, giving us more free time – both to employ in leisure pursuits and to come up with yet more ingenious inventions. People became longer-lived, more literate, more comfortable, better-fed, taller, more numerate and more numerous. They also, incidentally, become more peaceable: far from being ruthless or selfish, capitalism joins men and women together in a cats-cradle of mutual dependency. That, in a nutshell is the history of homo sapiens.

None of this would need saying, except that an industry has grown up seeking to explain the “causes” of poverty. To pluck a more or less random example, the Child Poverty Action Group blames the condition on unemployment, low pay and inadequate benefits. But these explanations beg the question. Unemployment is, if you think about it, our default status. Hunter-gatherers are unemployed, in the sense that they don’t earn salaries. They spend their days in a constant search for food, and typically die in their thirties. The alternative to low pay is not higher pay – if it were, the employee could just switch jobs – but no pay: again, our elemental condition. Likewise, the alternative to “inadequate benefits” is not more generous benefits, but no benefits at all – the lot of the human race for almost the whole of its existence and, for most people on the planet, their lot still.

In one sense, poverty can be “caused” by an exogenous shock, such as a natural disaster or a war. These events reduce people to indigence by breaking down the networks of trade and exchange, both in the literal sense of destroying roads, bridges and buildings, and sometimes also in the wider sense of eroding the mutual confidence on which such networks depend or wrecking the legal infrastructure which secures property rights and contracts. There is a strong correlation between the poorest territories on Earth and civil or interstate conflicts. One way to think of marauding militias is as a regression toward our original state, an undoing of law-based capitalism, a reversion to the mean. Most other “causes” of poverty fall into the same category: illiteracy, slavery, autarky, corruption.

Yes, corruption. Like poverty, corruption is primordial. As soon as wealth became portable – that is, around the time of the first cities some 10,000 years ago – some of our ancestors began to predate upon others. Instead of growing their own crops, they found it profitable to raid other people’s, and more profitable still to regularise that predation through tithes, tolls and taxes. A modern African kleptocracy is little different, in this sense, from an Iron Age slave empire or a mediaeval European monarchy: all are what happens when a small elite systematically loots resources. Again, it is free-market capitalism, allied to representative government, that is the exception.

Why does this matter? Because many anti-poverty activists are unwittingly pushing for precisely the policies that cause a reversion to penury. Look at the manifestos of the mega-charities and campaign groups which say they want to help developing nations. Almost all of them aim to prevent, or at least to limit, the one thing that is doing the most to help people in the poorest places on Earth, namely integration into global markets.

It’s very easy to become angry about, say, women working for two dollars a day in a tropical sweatshop. But, please, do those women the credit of being able to make rational choices. To Western eyes, they might have abandoned wholesome villages for sprawling shantytowns. But perhaps the shantytown offered amenities that the village didn’t: electricity, running water, rudimentary schools and clinics and, above all, jobs. Sure, you and I wouldn’t want to work for two dollars a day; but we should be wary of imposing an essentially aesthetic judgment on people when it retards their chances of advancement.

What’s the alternative? More trade. More specialisation. More globalisation. The wider we extend the web of exchange, the more people we lift out of poverty. And shall I tell you the best bit? It’s already happening.

Daniel Hannan is a Conservative Member of the European Parliament and blogs at www.hannan.co.uk