F. Written for students

We hope that many college students, especially those who are Christians, will find this text helpful as they seek to determine their own convictions about appropriate methods of addressing world poverty. We have both spent many years in classroom teaching at the university level, and we hope that this book will prove helpful as an assigned text in college and seminary classes dealing with care for the poor and a Christian approach to economic questions.

G. Why don’t economists agree on a solution to poverty?

Someone might raise an objection at this point: “If there is such a clear solution to poverty, why do economists not all agree about it and write books explaining what the solution is?” In response, we would cite several points:

(1) Some do agree. Several respected economists have written books that agree in large measure with the solutions we propose in this book. For example, much of what we have written here is indebted to the work of David S. Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor.12 Landes is professor emeritus at

Harvard University and one of the world’s most respected economic historians.

Readers may notice, especially in chapters 7-9, that we cite Lan- des’s book more than any other source. We do this because his massive study (658 pages, including 126 pages of fine-print documentation) is an unparalleled source of historical information about the economic development of all the nations (or regions) of the world in the last five hundred years. The first sentence in his book reads, “My aim in writing this book is to do world history.”[1] And world history, on a grand scale, is what he does. John Kenneth Galbraith said this book “will establish David Landes as preeminent in his field and in his time.” Nobel laureate Kenneth Arrow says the book is “a picture of enormous sweep and brilliant insight . . . [with] incredible wealth of learning.”[2]

In addition, we agree with several other economists and developmental historians in key sections of our book, especially regarding the economic and legal policies that are necessary to overcome poverty. For example, we cite with approval several key sections from the writings of Hernando de Soto; William Easterly; Paul Collier; P. T. Bauer; Lawrence Harrison; Niall Ferguson (a historian); Daron Acemoglu and James A. Robinson (though we also differ with them on the importance of culture; see below); and William Baumol, Robert Litan, and Carl Schramm.[3]

Of course, many economists do not advocate the solution we propose in this book. They propose only partial solutions or even incorrect solutions because of their underlying assumptions.

  • (2) Professional donors. For example, some economists are “profes?sional donors.” They spend much of their time giving away other people’s money, and their primary solution to world poverty is to give away more money (even though they admit that giving away money has not solved the problem so far). The most prominent representative of this approach is Jeffrey Sachs in his book The End of Poverty.16
  • (3) Pure economists. Others are “pure economists” (at least in their solutions). They do not address cultural, moral, or spiritual values at any length, presumably because they think that these topics are outside the realm of legitimate study for economists. One example of this approach is that of Dambisa Moyo in her book Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa.11 Moyo offers a perceptive analysis of the harm caused by foreign aid to Africa, but her solution is simply to stop the foreign aid, assuming that after aid is stopped, “good governance . . . will naturally emerge.”[4] [5] [6] She mentions cultural values in passing but minimizes them.
  • (4) Cultural equalizers. Other economists are “cultural equalizers.” They are convinced that it is misleading or even wrong to say that any one culture is “better” than any other, even “better” at producing economic growth. Therefore, there must be some other reason, or perhaps it is an accident, that some countries have become wealthy and others remain poor. We should not try to explain the disparity by saying that one country’s cultural habits and values are better than another’s.

For example, more than a dozen scholars, each with outstanding credentials and publications on economic development and foreign aid, contributed to Making Aid Work, a 2001 symposium on foreign aid. There was hardly a word in the entire book about the need for cultural transformation within countries.[7]

  • (5) Fatalists. Still another approach has been taken by those we may call “fatalists.” They claim that economic prosperity came about simply because some nations had the good fortune of favorable geographic factors, such as moderate weather, abundant natural resources, and useful animals, from the beginning, so it was inevitable that they would become rich while others would remain poor. The primary example of this approach is Jared Diamond in his book Guns, Germs, and Steel: The Fates of Human Societies.20 According to Diamond, geography is more important than everything else, and his analysis gives no room for the impact of differing human choices, cultural values, and moral and spiritual values.
  • (6) Socialists and other “planners.” Still other economists are “socialists,” of stronger or weaker varieties. In their view, the solution to poverty is more planning—wise government “experts” should plan and direct most everything in an economy. If it is pointed out that government control of factories and businesses has not worked well in the past, their response is that the wrong government experts were in charge. We simply need different experts, better ones, they say. In fact, if asked, they might even humbly suggest that they themselves might just be available to serve as these new experts—in a limited capacity, of course—at least initially. Easterly refers to these economists as “Planners,” and says they usually do more harm than good.[8] [9]

With these six viewpoints in mind, consider the predicament of leaders in poor nations. They have at least six radically different opinions, all from economic “experts.” With all these “experts” telling poor nations how to solve their problems, it is no wonder that their government leaders find it hard to know whom they should trust. Are the professional donors right? The pure economists? The fatalists? The socialists? The messages are contradictory and confusing.

Abhijit Banerjee, professor of economics at the Massachusetts Institute of Technology and a director of the Abdul Latif Jameel Poverty Action Lab there, summarizes the current confusion in academic studies of aid and economic development:

Instead of a handful of simple and clear-cut laws that tell us what to do and what to expect, we have a hundred competing tendencies and possibilities, of uncertain strength and, quite often, direction, with little guidance as to how to add them up. We can explain every fact many times over, with the result that there is very little left that we can both believe strongly and act upon.[10]

Robert H. Bates, professor of government at Harvard, agrees: “In truth, there is no theory of development that is logically compelling and demonstrably valid. One good indicator of this deficiency is the very abundance of theories. . . . The field of development responds less to evidence than to political fashion.”[11]

That is why we think this book can play a unique role. It combines economic analysis with biblical teachings. Once we are able to set aside limiting assumptions and look honestly at results (asking, “What has worked in the past?”), it seems to us that the economic analysis points clearly in the direction that we propose.

On the biblical side, we argue in this book that the moral and economic teachings of the Bible can give confidence to leaders in poor nations that our solutions are supported by the very teachings that God himself gave to the human race. This provides a strong reason for leaders, especially Christian leaders, to follow these principles rather than others that have been proposed.

  • [1] Ibid., xi.
  • [2] Cited in ibid., i.
  • [3] Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else(New York: Basic Books, 2000); William R. Easterly, The Elusive Questfor Growth: Economists’ Adventures andMisadventures in the Tropics (Cambridge, MA: The MIT Press, 2001); The White Man’s Burden: Why the West’sEfforts to Aid the Rest Have Done So Much 1ll and So Little Good (New York: Penguin, 2006); Paul Collier, TheBottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It (Oxford: Oxford University Press, 2007); P. T Bauer, Equality, the Third World, and Economic Delusion (Cambridge, MA: HarvardUniversity Press, 1981); Lawrence Harrison, The Central Liberal Truth (New York: Oxford University Press,2006); Niall Ferguson, Civilization: The West and the Rest (New York: Penguin, 2011); Daron Acemogluand James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: CrownPublishers, 2012); William Baumol, Robert Litan, and Carl Schramm, Good Capitalism, Bad Capitalism andthe Economics of Growth and Prosperity (New Haven: Yale University Press, 2007). See also Milton Friedman, Capitalism and Freedom: A Leading Economist’s View on the Proper Role of Competitive Capitalism (Chicago:University of Chicago Press, 1962); William J. Bernstein, The Birth of Plenty: How the Prosperity of the ModernWorld Was Created (New York: McGraw-Hill, 2004).
  • [4] Jeffrey Sachs, The End of Poverty (New York: Penguin, 2005).
  • [5] 11 Dambisa Moyo, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa (New York:Farrar, Straus & Giroux, 2009).
  • [6] Ibid., 143.
  • [7] Abhijit Vinayak Banerjee et al., Making Aid Work (Cambridge, MA: The MIT Press, 2001). Acemoglu andRobinson also argue that cultural factors are of little value in explaining economic differences amongnations; we discuss their view on 309-15.
  • [8] Jared Diamond, Guns, Germs, and Steel: The Fates of Human Societies (New York: W. W. Norton, 1999).
  • [9] See Easterly, The White Man’s Burden, esp. 3-33 (“Planners Versus Searchers”) and 37-162 (“Part I: WhyPlanners Cannot Bring Prosperity.”
  • [10] Banerjee, writing in Making Aid Work, 136-37.
  • [11] Robert H. Bates, writing in ibid., 68.
 
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