CultureWatch

Bill Muehlenberg's commentary on issues of the day...

Rockenomics and the Poor

Nov 20, 2006

The G20 Summit in Melbourne is now history, as is the Australian tour of U2. Both tried to grapple with the issue of world poverty. One, it seems to me, will be more successful than the other.

As for the Melbourne meeting of world finance ministers, the usual melodramatics were on display. Angry protestors hurled urine-filled balloons at police, and shouted anti-Bush and anti-Howard slogans. Just how all that is supposed to relieve global poverty remains unclear. But it apparently made some people feel good.

And feeling good is often seen as more important than sound economics. When Bono flies around in his private jet and charges people an arm and a leg to hear him perform, all the while denouncing capitalism and the West, he undoubtedly feels good as a result. Just how many poor people however are helped by such activities is another matter altogether.

Now Bono is genuinely concerned about helping the poor, and he deserves credit for that. But whether his rockenomics will in fact help anyone is a moot point. Past initiatives by celebrities and rock stars to combat global poverty have been less than convincing. But at least a lot of young people who participated in such events would be feeling good about themselves. But how will the world’s poor be feeling?

The G20 meeting also tried to deal seriously with the issue, but minus the rock music and bumper sticker ethics. And their strategies may well do more for the world’s poor. Helen Hughes, writing in today’s Australian (November 20, 2006), suggests that the emphasis of the G20 meeting – free trade and economic growth – is far preferable to the old worn-out appeals to socialism by the rock stars.

How successful, or otherwise, foreign aid has been, is part of her concern. “The Group of 20 Finance Ministers met at the weekend to discuss ways to maintain global prosperity so that China, India and the other Asian countries that are developing can trade their way out of backwardness and poverty. The emphasis was on what could actually be done to maintain monetary stability.”

She continues, “Is this a reason for bullying workers in banks or the Defence Department? Or for ageing rock stars who have run out of musical inspiration to attack Australia’s foreign policy? A policy, remember, that does much more to help developing countries get on their feet than pouring buckets of money into the maws of corrupt ‘Big Men’ who not only keep their countries poor but murder their own citizens by the hundreds of thousands can ever do. The evidence that aid has failed to help poor people or turn corrupt politicians toward growth is now mountainous. Has Bono become deaf listening to his own music?”

The history of foreign aid has not been impressive: “Governments that have been forgiven debt have incurred more and larger debts to fund their obscene lifestyles. Mercedes’ most lucrative market is for their armoured limousines in Africa and the Middle East. Aid was used to buy a jet plane so that an African potentate with 30 wives could fly around the world begging for food aid. Non-government aid workers and the World Food Program are being kept out of Darfur and other African hot spots. They are asked for huge bribes when they are given access. A great deal of food aid, despite aid workers’ best endeavours, finishes up being sold in souks.”

After examining some Asian economic success stories, she turns her attention to the South Pacific: “The Pacific receives more aid – dominantly Australian – per capita than any other region. But aid is not going to the 85 per cent of people who still live in villages. In Papua New Guinea, HIV/AIDS is reaching African levels because there is no education or healthcare. In the South Pacific as a whole after 30 years of aid there are 1.5 million, mostly male, unemployed or underemployed. There has been no growth. People are not starving because women work in gardens and orchards, but gangs of youths are roaming the streets of Port Moresby and Lae and spreading to other Pacific centers. Port Moresby repeatedly features among the most unliveable cities in the world. The government elites that absorb the aid live behind barbed wire and send their children to Australia to be educated.”

She concludes: “Rockeconomics is no path to development. Compassionate Australians must take the trouble to understand why aid is not a panacea and often not even a help. We know that trade is more effective than aid and must avoid harming people in developing countries through aid.”

Global poverty is a complex and very real problem. It is good that those other than economists draw attention to it. But economic realism, not clichés from rock stars, is needed to turn things around. And there is nothing wrong with celebrities displaying a conscience. But their concerns need to be wedded to clear thinking and economic nous in order for them to be put to good use.

www.theaustralian.news.com.au/story/0,20867,20785442-7583,00.html

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5 Responses to Rockenomics and the Poor

  • Well said Bill. I attend a fairly conservative church in country Victoria, but I was amazed how many of our congregation (mostly the younger ones) attended the U2 concert in Melbourne over the weekend. And what did they hear? Saint Bono preaching his social gospel and explaining how Jews, Moslems and Christians should be able to coexist in peace.

    It says a lot about the luke-warm state of much of the church when so many Christians are prepared to spend up big and travel to see Bono, but relatively few can be bothered to turn up and support something like Right to Life’s annual ‘Freedom to be Born’ march.

    Ewan McDonald, Victoria

  • To me it’s a real dilemma that we in Australia (mostly) have a wonderful standard of living yet so many others have wretchedly poor lives. Surely we all have a role in trying to change this and I believe that we as individuals as well as a nation have the capacity to help. And I understand that as individuals we are quite generous when it comes to supporting NGOs working in poor countries, etc. However it seems to me that Australian governments dont worry too much about such global issues as mass poverty, etc unless there is a groundswell of public opinion that something needs to change. An example of this was the East Timor mess of a few years ago when we saw footage of civil strife including pictures of distraught people trying to get into the Australian embassy to avoid the anarchy, etc. We as a nation were appalled and called for action and I think that the Howard Government was similarly moved to do something about the crisis on ‘our doorstep’.

    To me the benefit of Bono et al is that if they are playing a part in encouraging Australians – especially younger Australians who I think are largely apathetic – to think about and discuss global issues then the Australian Govt will be ‘forced’ to address the popular concerns (which seems to be happening at present in terms of global warming, etc)

    Don Still

  • Dear Bill,

    I derive no joy from criticising your article – usually they are enlightening. But not this one.

    When you choose to criticisie a person I think it is incumbent on you not to distort or misrepresent their argument(s) in order to make your task easier.

    Firstly, it is blatantly dishonest to in any way seek to link Bono with an endorsement of the violent demonstrations that occured during the G20 summit. I specifically recall seeing him on the TV news condeming the violence of those demonstations.

    Secondly, you state “When Bono flies around in his private jet and charges people an arm and a leg to hear him perform, all the while denouncing capitalism and the West, he undoubtedly feels good as a result”. Whether U2 charges too much for people to attend their concerts is inconsequential – certainly other performers, such as Billy Joel, who also recently toured Australia, charge no less. Either way it is of little consequence. But more importantly, where is the evidence to support your charge that Bono flies around the world “denouncing capitalism”?

    Secondly, you parphrase Helen Hugh’s argument that “free trade and economic growth – is far preferable to the old worn-out appeals to socialism by the rock stars”. Again, where is your evidence that Bono and U2 have condemned economic growth and advocated socialism as the remedy to poverty in third world countires?

    Thirdly, you again favourably quote Helen Hugh’s who condemns “ageing rock stars who have run out of musical inspiration to attack Australia’s foreign policy? A policy, remember, that does much more to help developing countries get on their feet than pouring buckets of money into the maws of corrupt ‘Big Men’ who not only keep their countries poor but murder their own citizens by the hundreds of thousands can ever do”.

    U2’s music may not be everyone cup of tea, but not even their worst critic would suggest they have “run out of musical inspiration”. Only an ignorant critic would embarass themselves with such a foolish statement. And as to foreign policy what U2 have argued for is for wealthy countries to contribute 0.7% of GDP to foreign aid. Many European countries, such as Britian, presently contribute about 0.5% of GDP to foreign aid. Australia manages a mere 0.28% and ranks 19th out of the 22 OECD countries in terms of the generosity of our foreign aid effort. Obviously, there is a financial capacity to do more. But here again you distort U2’s message by deliberately muddying the waters about the quantum of aid and the method of delivering such aid. Perhaps you would be so kind as to supply the evidence that Bono and U2 support the notion that foreign aid is best wasted via contributions to corrupt governments.

    It is easy to build a straw man and then tear him down. The problem you have is that Bono is not made of straw.

    I would have thought you sensitive to the need to avoid wrongly attributing to people positions and arguments to which they do not in fact subscribe. You certainly have not provided any evidence to support your various accusations when it is obviously incumbent upon you to do so.

    Intellectual shallowness only serves to make the writer, not the subject, look like a fool.

    Yours sincerely, Frank Lindsey, Perth

  • Thanks Frank

    But I nowhere said Bono condoned the violence. It is you who makes this connection, not I.

    As to Bono, yes, he has gone through a development recently, moving away from his earlier distain of the free market, to now seeking to utilise it. His Product RED initiative, sometimes called “punk capitalism,” is a case in point. As recently as October this year in a Larry King interview he discussed this, and his rethinking:

    “Well, there’s a bit of punk rock about it because it’s really up front and kind of in your face. And it’s, you know, we have this thing, I grew up, I’m in a band, and I’ve had kind of a little – I’m always looking a little bit sideways at big business and wondering, they’re out for profits, blah, blah, blah. Then you start to realize that there’s some very smart people working these corporations and how would we get these really smart people to work for the world’s poor?”

    So thanks for allowing me to clarify that point. And as to your disapproval of Hughes, well I suggest you tackle her with your concerns.

    Bill Muehlenberg, CultureWatch

  • Interesting that Bono himself has moved his publishing activities to Holland because of its lower taxes, while he whinges that the rest of us are not being taxed enough. This goes to show that he recognizes that in reality people are more productive when they are allowed to keep more of their own money — see Kudos for Bono
    A lesson for all on how incentives really work
    from Townhall.com. This also relates to Prof. Arthur Brooks’ recent study showing that conservatives are more generous than liberals (see Charitable nation).
    Jonathan Sarfati, Brisbane

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