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InvisibleXlea321
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Registered: 02/26/01
Posts: 9,134
Foreign aid - more harm than good
    #2222294 - 01/06/04 04:59 AM (13 years, 3 months ago)

On the edge of lunacy

British foreign aid is now targeted at countries willing to sell off their assets to big business

George Monbiot
Tuesday January 6, 2004
The Guardian

Spare a thought this bleak new year for all those who rely on charity. Open your hearts, for example, to a group of people who, though they live in London, are in such desperate need of handouts that last year they received ?7.6m in foreign aid. The Adam Smith Institute, the ultra-rightwing lobby group, now receives more money from Britain's Department for International Development (DfID) than Liberia or Somalia, two of the most desperate nations on Earth.
Are the members of the Adam Smith Institute starving? Hardly. They work in plush offices in Great Smith Street, just around the corner from the Houses of Parliament. They hold lavish receptions and bring in speakers from all over the world. Big business already contributes generously to this good cause.

It gets what it pays for. The institute's purpose is to devise new means for corporations to grab the resources that belong to the public realm. Its president, Madsen Pirie, claims to have invented the word privatisation. His was the organisation that persuaded the Conservative government to sell off the railways, deregulate the buses, introduce the poll tax, cut the top rates of income tax, outsource local government services and start to part-privatise the national health service and the education system. "We propose things," Pirie once boasted, "which people regard as being on the edge of lunacy. The next thing you know, they're on the edge of policy." In this spirit, his institute now calls for the privatisation of social security, the dismantling of the NHS and a shift from public to private education. It opposes government spending on everything, in other words, except the Adam Smith Institute.

So what on earth is going on? Why are swivel-eyed ideologues in London a more deserving cause than starving refugees in Somalia? To understand what is happening, we must first revise our conception of what foreign aid is for.

Aid has always been an instrument of foreign policy. During the cold war, it was used to buy the loyalties of states that might otherwise have crossed to the other side. Even today, the countries that receive the most money tend to be those that are of greatest strategic use to the donor nation, which is why the US gives more to Israel than it does to sub-Saharan Africa.

But foreign policy is also driven by commerce, and in particular by the needs of domestic exporters. Aid goes to countries that can buy our manufacturers' products. Sometimes it doesn't go to countries at all, but straight to the manufacturers. A US government website boasts that "the principal beneficiary of America's foreign assistance programs has always been the United States. Close to 80% of the US Agency for International Development's contracts and grants go directly to American firms."

A doctor working in Gondar hospital in Ethiopia wrote to me recently to spell out what this means. The hospital has none of the basic textbooks on tropical diseases it needs. But it does have 21 copies of an 800-page volume called Aesthetic Facial Surgery and 24 volumes of a book called Opthalmic Pathology. There is no opthalmic pathologist in training in Ethiopia. The poorest nation on Earth, unsurprisingly, has no aesthetic plastic surgeons. The US had spent $2m on medical textbooks that American publishers hadn't been able to sell at home, called them aid and dumped them in Ethiopia.

In Britain the Labour government claims to have abandoned such practices, though only because they infringe European rules on competition. But now it has found a far more effective means of helping the rich while pretending to help the poor. It is spending its money on projects that hand public goods to corporations.

It is now giving, for example, ?342m to the Indian state of Andhra Pradesh. This is a staggering amount of money, 15 times what it spent last year on the famine in Ethiopia. Why is Andhra Pradesh so lucky? Because its chief minister, or "chief executive" as he now likes to be known, is doing to his state what Pinochet did to Chile: handing everything that isn't nailed down, and quite a lot that is, to big business. Most of the money DfID is giving him is being used to "restructure" and "reform" the state and its utilities.

His programme will dispossess 20 million people from the land and contribute massively to poverty. DfID's own report on the biggest of the schemes it is funding in the state reveals that it suffers from "major failings", has "negative consequences on food security" and does "nothing about providing alternative income for those displaced". But it permits Andhra Pradesh to become a laboratory for the kind of mass privatisation the department is seeking to encourage all over the world.

In Zambia, DfID is spending just ?700,000 on improving nutrition, but ?56m on privatising the copper mines. In Ghana, the department made its aid payments for upgrading the water system conditional on partial privatisation. Foreign aid from Britain now means giving to the rich the resources that keep the poor alive.

So there are rich pickings for organisations like the Adam Smith Institute. It is being hired by DfID as a consultancy, telling countries like South Africa how to flog off the family silver. It is hard to see how this helps the poor. The South African government's preparations for privatisation, according to a study by the Municipal Services Project, led to almost 10 million people having their water cut off, 10 million people having their electricity cut off, and over 2 million people being evicted from their homes for non-payment of bills.

What we see here, in other words, is a revival of an ancient British charitable tradition. During the Irish potato famine, the British government made famine relief available to the starving, but only if they agreed to lose their tenancies on the land. The 1847 Poor Law Extension Act cleared Ireland for the landlords. Today, the British government is helping the corporations to seize not only the land from the poor, but also the water, the utilities, the mines, the schools, the health services and anything else they might find profitable. And you and I are paying for it.

All this was pioneered by the sainted Clare Short. Short's trick was to retain her radical credentials by publicly criticising the work of other departments, while retaining her job by pursuing in her own department policies that were far more vicious and destructive than those she attacked. Blair's trick was to keep her there, to assure old Labour voters that they still had a voice in government, while ensuring that Short did precisely what his corporate backers wanted.

I never thought I would hear myself saying this, and I recognise that in doing so I may be handing ammunition to the rightwing lobby groups campaigning for a reduction in government spending, such as, for example, the Adam Smith Institute. But if this is what foreign aid amounts to, it seems to me that there is too much of it, rather than too little. Britain's Department for International Development is beginning to do more harm than good.

http://www.guardian.co.uk/comment/story/0,3604,1116854,00.html


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Invisiblecarbonhoots
old hand

Registered: 09/11/01
Posts: 1,351
Loc: BC Canada
Re: Foreign aid - more harm than good [Re: Xlea321]
    #2224193 - 01/06/04 10:05 PM (13 years, 3 months ago)

The Adam Smith institute.

Sounds like the British version of the CD Howe Institute, almost, except the government here doesn't fund them yet.

Thank God the water isn't privatized in my section of BC yet...the water here is free! Free I say! Use as much as you want! It's tough to beat that system.

The electricity is public too...5.5 cents (Can$) per kilowatt hour,all the time! I bet no private electric company can beat that.

I guess the Adam Smith inistitute has not re-educated the public here.

Al these trends follow the same tired theme...first the promise is that privatization will benefit all through lower prices(benefiting all is a socialist theme), of course it doesn't work, so free trade agreements are imposed to make the public sector illegal(they lie and call this 'securing private investment' which is to bring confidence in the system and, again, lower prices to benefit all) that just serves to give these vampires more leverage.

The only people who benefit are the small group of majority owners, the average guy(majority) is left with less, and less, and less!

If the public would ever wake up and assert their democratic power, we could easily reverse this trend...

I liked the article. It's good to post these things, to spread awareness...


--------------------
  -I'd rather have a frontal lobotomy than a bottle in front of me

CANADIAN CENTER FOR POLICY ALTERNATIVES


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Anonymous

Re: Foreign aid - more harm than good [Re: Xlea321]
    #2224218 - 01/06/04 10:15 PM (13 years, 3 months ago)

His was the organisation that persuaded the Conservative government to sell off the railways, deregulate the buses... cut the top rates of income tax, outsource local government services and start to part-privatise the national health service and the education system... In this spirit, his institute now calls for the privatisation of social security, the dismantling of the NHS and a shift from public to private education. It opposes government spending on everything...

well i'm sure you know how that sounds to me...  :wink:


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InvisibleXlea321
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Registered: 02/26/01
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Re: Foreign aid - more harm than good [Re: ]
    #2225057 - 01/07/04 05:22 AM (13 years, 3 months ago)

If only you knew what happened to the railways mush..they had to be pretty much re-nationalised after the private companies ran them into the ground and sent fares skyrocketing. A handful of directors made themselves multi-millionaires and destroyed the rail system. A bigger more costly disaster it would be hard to find.


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OfflineGazzBut
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Re: Foreign aid - more harm than good [Re: Xlea321]
    #2225173 - 01/07/04 08:03 AM (13 years, 3 months ago)

Yep, and now they are moving in slowly but surely on the NHS. Theories are one thing but reality is quite another.


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Always Smi2le


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Anonymous

Re: Foreign aid - more harm than good [Re: Xlea321]
    #2226689 - 01/07/04 07:49 PM (13 years, 3 months ago)

why didn't privatization work for the railways?


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InvisibleXlea321
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Re: Foreign aid - more harm than good [Re: ]
    #2227513 - 01/08/04 06:09 AM (13 years, 3 months ago)

I thought it did work. It made a handful of fat cat directors millions and cost the rest of us billions. That's successful privatisation.


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OfflineGazzBut
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Re: Foreign aid - more harm than good [Re: ]
    #2227586 - 01/08/04 08:02 AM (13 years, 3 months ago)

Really it makes sense that a well run monopoly will always be cheaper than what a privatised market place can offer.


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Always Smi2le


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Anonymous

Re: Foreign aid - more harm than good [Re: GazzBut]
    #2228168 - 01/08/04 02:04 PM (13 years, 3 months ago)

Really it makes sense that a well run monopoly will always be cheaper than what a privatised market place can offer.

government operated services are rarely well run.

i know nothing about the privatization of the UK railways. how were they privatized? who ran them? how were they selected?


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OfflineGazzBut
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Re: Foreign aid - more harm than good [Re: ]
    #2228426 - 01/08/04 03:19 PM (13 years, 3 months ago)

I couldnt give you a detailled analysis of the whole affair really. The infos out there if you are interested but its not really riveting stuff.
In all honesty you are right, BR wasnt much better when it was run by the government. It may have even been worse. My point is logically a monopoly should be able to operate better as it does not have to compete and can purely concern itself with offering the optimum service. So when a goverment says that privatisation will improve any service what they are really doing is admitting their complete ineptitude. Obviously these supposed highly intelligent people cant really be that inept can they? No they are merely mispending money, paying their friends more than they deserve and basically treating the peoples right as their own personal cash cow. So privatise ahead, you'll just have more people (like the Adam Smith institute for example!) fleecing the people, and the trains will still be late and the prices will keep going up..like they did 2 weeks ago!



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Always Smi2le


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Anonymous

Re: Foreign aid - more harm than good [Re: GazzBut]
    #2228896 - 01/08/04 06:20 PM (13 years, 3 months ago)

My point is logically a monopoly should be able to operate better as it does not have to compete and can purely concern itself with offering the optimum service.

if the government nationalized the auto industry, bringing it under a state-run monopoly, i guarantee you that quality would plummet.

if a particular service simply is not profitable, then it will not be provided by a free market. this is just fine. if a service isn't as valuable as the resources that go into providing it, it is a waste of resources and it should "fail" as a business.

consider a state owned theater as an example. lets say that the utilities, maintenance, etc. of our theater total $10,000 a month. it sells tickets for a dollar a peice, and performs 8 shows a month. it has 500 seats and every show is sold out. it makes $4000 a month in ticket sales, and the balance is made up with government subsidies. it runs smoothly. people see the shows for a dollar, the government subsidizes it, and the bills get paid. then one day the theater is privatized and sold. the new company finds that in order to pay the bills, it must increase its ticket prices to $2.50, but at this price, much fewer people go to the theater... half the seats go empty and it only brings in $5000 a month. perhaps they find that the revenue maximizing price is $1.50 per ticket, just selling out the shows and bringing in $6000 a month, but even at this price, and even after cutting costs as much as possible (to let's say... $8,000 a month), it cannot pay the bills. it goes under and is closed up.

this isn't a bad thing. the service provided by the theater was worth a total of $6000 a month and the cost of running it was $8,000 a month, even when run optimally. it was a wasteful enterprise. it cost more to run than it was worth. it cost more to operate than people were willing to pay for its services. that is why it has to be supported by force... with tax dollars.

in the case of the railways, perhaps the service they were providing simply wasn't worth as much as the cost of inputs. i really don't know anything about it so i don't know.


Edited by Anonymous (01/08/04 06:23 PM)


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OfflineGazzBut
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Re: Foreign aid - more harm than good [Re: ]
    #2230469 - 01/09/04 08:08 AM (13 years, 3 months ago)

Quote:

i guarantee you that quality would plummet.




An amusingly bold statement. The only thing you could gaurantee is variety would plummet. Any other statements are pure speculation which happily fit with your philosophy..wow thats uncanny eh?

Nice example with the theatre although Im not really sure how that relates to infrastructure i.e railways and utilities i.e Power and water etc.

If people have to be forced to contribute to the society they live in I think it says more about them than the people doing the supposed forcing. Perhaps you should leave the country to avoid this constant theft of your money....u could take luvdem with you too! :grin:


--------------------
Always Smi2le


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Anonymous

Re: Foreign aid - more harm than good [Re: GazzBut]
    #2230758 - 01/09/04 12:11 PM (13 years, 3 months ago)

An amusingly bold statement. The only thing you could gaurantee is variety would plummet. Any other statements are pure speculation which happily fit with your philosophy..wow thats uncanny eh?

i'm sorry. i thought it was common knowledge that when certain industries are nationalized, the goods and services provided by them are very often of poor quality. i'd cite pretty much any consumer good from the old soviet bloc as an example.


the yugo.

If people have to be forced to contribute to the society they live in I think it says more about them than the people doing the supposed forcing.

what's "supposed" about it?

everyone gets forced. if in addition to what is taken in taxes, you willingly give 5 times that to charity, you're still going to be taxed anyway.

i personally don't pay any federal taxes. very little of the money i earn is forcefully taken from me to pay for social programs. i willingly participate in various charity programs each year, one of which includes at least 2 weeks of construction and repair work on poor folk's homes in depressed parts of the country. it's not self-interest that drives my disdain for forced wealth redistribution. i willingly give far more than is taken from me in the first place. moving away wouldn't help.


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InvisibleXlea321
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Registered: 02/26/01
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Re: Foreign aid - more harm than good [Re: ]
    #2230768 - 01/09/04 12:17 PM (13 years, 3 months ago)

i'm sorry. i thought it was common knowledge that when certain industries are nationalized, the goods and services provided by them are very often of poor quality.

Depends on the industry. Privatisation of monopolies like water supplies, railway networks etc generally doesn't work out. See the Bolivian water scandal.

very little of the money i earn is forcefully taken from me to pay for social programs.

Do you drive? If you do then you are freeloading off all the people who have paid tax's to build roads.

Are you willing to truly make a stand for your beliefs and only drive on roads built through charity as opposed to tax dollars?


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Anonymous

Re: Foreign aid - more harm than good [Re: Xlea321]
    #2230819 - 01/09/04 12:57 PM (13 years, 3 months ago)


Depends on the industry. Privatisation of monopolies like water supplies, railway networks etc generally doesn't work out. See the Bolivian water scandal.


i haven't researched it at all, but i'm sure there are places where privately operated water suppliers and railway networks have worked. just because something requires infrastructure doesn't mean that the government must provide it. the cable company is privately run here, cell phone networks are private, and the ground phone lines are too. even true monopolies needn't be state-run (though they typically need the blessing of the state to exist)... zippers for example.

Do you drive? If you do then you are freeloading off all the people who have paid tax's to build roads.

i'd be freeloading whether i drive or not. in addition to not driving, i'd have to boycott all items shipped by truck. this would of course include the oil that heats my home. if i needed to call a plumber or an exterminator, i could only hire one that was willing to walk to my house, and only one that used local products that hadn't been shipped. eating food from the grocery store would be out of the question, and i'd have to make my own clothes and shoes.

whether i drive or not, i use the roads. as long as the government is paying for them, i can't help but freeload. sorry.


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OfflineViveka
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Re: Foreign aid - more harm than good [Re: GazzBut]
    #2230903 - 01/09/04 01:31 PM (13 years, 3 months ago)

Quote:

My point is logically a monopoly should be able to operate better as it does not have to compete and can purely concern itself with offering the optimum service.




That "logic" makes no sense. If a provider has no competition then there is no incentive for them to continually provide a solid product or a "competetive" price. If there's no competition, you have to take what you can get so to speak. Competition is always a good thing in a market. If Ford was the only auto maker around, they could make a crappy car and charge whatever they wanted for it and people would have no choice but to pay it if they wanted an automobile.


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OfflineAzmodeus
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Re: Foreign aid - more harm than good [Re: Viveka]
    #2230910 - 01/09/04 01:34 PM (13 years, 3 months ago)

Hell, if i had no competition, i'd charge as much as i could...what are the customers going to do?! go to the nonexistent competitors??? :lol:


--------------------
"Know your Body - Know your Mind - Know your Substance - Know your Source.

Lest we forget. "


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InvisibleXlea321
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Registered: 02/26/01
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Re: Foreign aid - more harm than good [Re: ]
    #2230966 - 01/09/04 01:54 PM (13 years, 3 months ago)

i'd be freeloading whether i drive or not. in addition to not driving, i'd have to boycott all items shipped by truck. this would of course include the oil that heats my home. if i needed to call a plumber or an exterminator, i could only hire one that was willing to walk to my house, and only one that used local products that hadn't been shipped. eating food from the grocery store would be out of the question, and i'd have to make my own clothes and shoes.

So there are some benefits to a system of taxation then? Do you think the private sector would have built a system of roads to benefit the population? Or just roads they could make a profit on?


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Anonymous

Re: Foreign aid - more harm than good [Re: Xlea321]
    #2231347 - 01/09/04 04:22 PM (13 years, 3 months ago)

So there are some benefits to a system of taxation then?

i'm not sure how that logically follows from what i just said. what i said was that there are benefits from roads. that's exactly why people would voluntarily pay to use them. could you explain?

Do you think the private sector would have built a system of roads to benefit the population? Or just roads they could make a profit on?

how can you make a profit providing things that people do not find useful? if the population did not find a particular service helpful, it would be very difficult to get them to voluntarily pay for it. it is profitable to provide useful things that people want and are willing to pay for. it is not profitable to provide things they aren't.


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OfflineGazzBut
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Re: Foreign aid - more harm than good [Re: ]
    #2231593 - 01/09/04 06:00 PM (13 years, 3 months ago)

Quote:

i personally don't pay any federal taxes. very little of the money i earn is forcefully taken from me to pay for social programs.




Obviously you are american and I am english so I might not be right here but if a fellow englishman said the above to me I would assume a) you are a student or b) you are working cash in hand and not declaring your taxes.


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Always Smi2le


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