Monday, March 14, 2005

I've been very wary of Tony Blair's initiative to cancel Third World debt: I've always suspected that it really will not solve any problems, and may only compound them. But Abiola Lapite, - an erudite British man of African descent - has confirmed my suspicions.

To put it succincly, I don't believe in foreign aid, nor in loaning money to the Third World. The best way to lift people out of poverty is to drop our tariffs against the produce of poor people, especially in agricultural products. That takes a lot of political courage, considering the kind of power farmers have in Europe. So we can safely assume that it won't get done, as Europe lacks the necessary courage for that kind of action.


Anonymous Cato said...

I couldn't agree more. Here's a proposal: Eliminate all tariffs on farm goods imported from the Third World. At the same time, take all of the money currently sent in foreign aid to Third World countries, and instead create a fund to help transition displaced European farmers into new employment. Brilliant, no?

9:58 PM  
Blogger Finnpundit said...

I'm not even sure any money has to be spent to aid farmers after that.

The prime example to study would be New Zealand. About 18 years ago New Zealand became the first country in the developed world to do away with all agricultural subsidies. And what happened? Nothing. Prices remained stable, food supplies remained plentiful, and there was very little disruption economically. Those domestic farmers who still wanted to farm wound up still being in business, only they were responding to market conditions, and were able to beat imports by virtue of their home base status.

There will always be local farmers. But those who can't live without subsidies will eventually figure out by themselves what they'd rather be doing. The state doesn't need to get involved in that.

3:24 PM  
Anonymous pohatta said...

Yep, the next time there is some kind of a public debate about agricultural subsidies, someone should mention New Zealand as an example.

1:43 PM  

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