Thursday, May 14, 2009

The Paradox of Aid

Why do we send food to people in starving countries? And why is it that they continue to starve?

Cheap/free food keeps poor countries poor, because the workers there all want to start with agriculture. Of course, the availability of cheap/free food prevents them from ever getting started, because there simply is no market for their goods. Thus, aid keeps poor countries poor. So why is it championed as such a great thing?

I've tried to have this discussion with some government/non-Econ majors and they seem to be reasonably accepting of the idea. Nonetheless, American imperialism of food aid continues unabated. What will it take to stop it?

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Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty