Foreign Aid – setting the record straight
Much current controversy relates to the vexed question of foreign aid for developing countries.
Money gifted by our taxpayers to ease the plight of impoverished citizens in a third world country is, at root, an act of charity - a humanitarian measure stemming from the collective consciousnesses of right-feeling citizens who are materially far better placed than the aid’s recipients. As such, we can only admire and approve it. This donation process has of course become a major, and complex, industry in its own right and, without it, many high-level projects like building dams and bridges would never get off the ground.
I have, however, written extensively on the causal link between the practice of granting foreign aid and the ubiquitous policies of protectionism that plague normal channels of international trade. This argument is more important than ever today. To grasp it, a passing familiarity with the work of 19th century French economist Frederic Bastiat would be a great help. But be prepared to have your notions of economic theory turned upside down!
The "seen" and the "unseen":
Bastiat made a crucial distinction between that which is seen, and that which is not seen. The work undertaken by aid agencies and their outworkers in undeveloped lies in the realm of what is seen: an immense humanitarian effort designed to alleviate suffering and enhance living standards in impoverished regions of the globe.
But what is NOT seen is the supremely iniquitous irony of erecting tariff barriers against the very products whose import into Europe would at once (i) allow their African, Asian and South American producers to free themselves, through trade, from the shackles of economic slavery; (ii) benefit our own citizens in terms of both the quality and price of those products; and (iii) reduce the need for institutional aid and all the bureaucracy and incipient corruption that goes with it.
Briefly: what is not seen is how our protectionist policies have served to impoverish them in the first place; nor how the removal of protectionist policies would facilitate the creation of real jobs in their own countries that are essentially creative rather than remedial.
Again: What is not seen is that, once released from the Brussels machine Britain could dismantle its EU-imposed import barriers, thereby allowing entry of equal, or better, quality imports than those available from the EU. That's the real "even playing field" because it allows for choice!
It is well-known and widely acknowledged that EU customs barriers bear sole responsibility for preventing EU member countries from importing, for example, foodstuffs from Africa or cloth from Asia. Freed from this egregious barrier, British costs of living would fall as consumer products drop in price. Goods manufactured in Britain would fall in price as their production inputs become cheaper and possibly of better quality. The benefits, seen and unseen, are incalculable.
Of course, British exporting companies seeking markets beyond the EU will face difficulties. But with determination and well-directed effort many will succeed and thrive. Historically, that is what international trade was all about!
Why succumb to the obstacles now?