Posts Tagged searchers
The Irish singer and co-founder of ONE, a campaigning group that fights poverty and disease in Africa, said it had been “a humbling thing for me” to realize the importance of capitalism and entrepreneurialism in philanthropy, particularly as someone who “got into this as a righteous anger activist with all the cliches.”
“Job creators and innovators are just the key, and aid is just a bridge,” he told an audience of 200 leading technology entrepreneurs and investors at the F.ounders tech conference in Dublin. “We see it as startup money, investment in new countries. A humbling thing was to learn the role of commerce.”
I’m a bit skeptical about the broader significance of these remarks on Bono’s activism, but I do think they’re illuminating. Over at the Acton Institute, I argue that Bono’s new humbled attitude is precisely what we need in our attempts to improve economic development:
Although I’m not overly confident that Bono’s sudden self-awareness is enough to radically shift his aid efforts away from fostering dependency, this small admission helps illuminate one of our key obstacles to doing good in the world: overzealousness paired with overconfidence.
Bono describes his realization as a “humbling thing,” and “humbling” is precisely what the foreign aid experts and economic planners could use. As Friedrich Hayek famously wrote, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” As the story of the Tower of Babel well confirms, man has a natural disposition to think he knows more than he knows and can construct beyond what he can construct—all to make a name for himself. The juice of righteous anger is a powerful enabler, and once it’s pumping through our veins it takes even less time for our human tendencies to escalate. After all, we’re only out to deliver humanity to heaven’s doorstep.
Such overconfidence in our own designs can be particularly destructive in the realm of economics, a science that’s in a constant battle over whether it should seek to explain human action, control it, or bypass it altogether. Such planners find a perfect match in eager activists such as Bono. “We can build your tower to heaven,” they’ll say, “and you can make a name for yourself. If only the right policy buttons are pushed and the right economic equilibrium is arranged, the world can be set to rights.”
Of all people, Christians should be aware of the deeper spiritual questions we should be asking, cautious not to be wise in our own eyes:
The economic engineer’s intrusion goes well beyond barging into more natural and effective social institutions. For in doing so, he treats dignified man and the unpredictable, invaluable relationships in which he engages as the mere mingling of predictable pieces in a larger static game. Such an intrusion should cause great alarm for those of us seeking restoration among the suffering. For how can we hope to improve conditions for the human person if we skip past what it means to be a human person? For the Christian in particular, God instructs each of us to do what the Lord wills. Are we really to Read the rest of this entry »
The makers of Instagram, a popular iPhone photo-sharing app, recently sold their company to Facebook for $1 billion. The company was founded a mere 18 months ago by a pair of twentysomethings. It has only 12 employees and brings in no revenue. No big deal.
This week at Values and Capitalism, I look at the story through a broader lens, pondering the implications of such sudden, unexpected technological changes and successes, particularly on those who think prosperity comes from creating five/ten/twenty-year plans to boost Industry/Company/Product X.
Here’s an excerpt:
The problem for the predictors and planners is that despite whatever economic or moral arguments they so cunningly concoct to justify shoving widgets X, Y and Z down our throats, one big, stubborn, complicating reality persists: as innovation continues, needs and desires change.
You can shake the Almighty Government Eight Ball all day long, but even if you get it right and are able to calculate some end-game net profitability for artificially propping up Failing Company X or Greenie Wizard Lab Y, who knows if such a plan will stay workable or cost-effective by tomorrow? Obama can toot the Subsidize Wind Farms horn till the ears of his great grandchildren are bleeding with debt, but what happens when Engineer Suzie wakes up the next morning with an idea for a cheaper, greener, more effective solution? Sorry Suzie, but we’ve already rolled the dice.
Yet this, I argue, is more than just an economic argument:
If you haven’t noticed, this is a clear economic problem (e.g. ethanol), yet coming at it from that angle will be unlikely to influence many progressives, whose positions, whether they admit it or not, rest mostly on rash-and-puffy moral superiority and a quest for control (e.g. “Smart Cars contribute to the common good, not your cute little digital Polaroids”). I’ll save those arguments for another day, because within the economic argument against this contorted game of Pick Your Favorites lies a different moral message about the way we view humans and human potential.
In short: Needs and desires change because people change.
To assume that the government can successfully pick winners and losers economically—whether with products, business or entire industries—is to assume that we humans live, or want to live, in a static world filled with static individuals who conceive of themselves in static terms. We will always buy what we currently buy, know what we currently know and pursue absolutely nothing of real value unless ole Goodie Government tells us otherwise.
But that’s not the way humans are, or, at the very least, that’s not what we were intended to be.
As much as folks might want to wield our semi-free economy toward constructing temples to Gaia and propping up eat-your-veggies initiatives, the market is or should primarily be about facilitating human engagement and human interaction. Such facilitation is integral to empowering human vocation, which should primarily informed by God and any on-the-ground cultural, social and religious institutions. All those select progressive “moral” causes might be fine-and-dandy as individual vocations in individual markets on any individual day of the year, but who is to say they are better or more desirable than innovating a new way to use our smartphones? (Don’t answer that, Joe Biden.)
To read the full post, click here.
In today’s post at Common Sense Concept, I summarize economist William Easterly’s marvelous dichotomy of planners vs. searchers.
Here’s the gist of the contrast:
The planners are the high-level organizers, sitting comfortably in their air-conditioned offices as they crunch numbers and try to plan their way to global prosperity. The searchers, on the other hand, are the folks on the ground, working effortlessly to locate direct needs, collaborate with on-the-ground resources, and create value.
The deeper issue, in my opinion, is that we need not confine such a contrast to matters of economic development. We as Westerners also need to transform our worldview to being that of a searcher.
Here’s another excerpt:
We as individuals, moral agents, and Christians, must become the searchers ourselves. Like an entrepreneur launching a new business opportunity, we need to get as close to the demand as possible. We cannot rely on a “fail-proof” plan for eliminating poverty. We cannot cower to a policy that promises to make the proper transfers on our behalf. Instead, we must expose ourselves to the searching process.
To read the full post, click here.
When the environment gets neglected, we hear that government needs to take action. When the economy goes down the tubes, we are told that bureaucrats must come to our rescue.
But for Evans Githinji, a 32-year-old entrepreneur in Kenya, achieving prosperity and exhibiting proper stewardship is simply a matter of imagination and initiative. Kenya’s economy is far from thriving, yet Githinji has found a way to both curb environmental harm and bring value to his economy despite his disadvantages.
Hear his story here:
As the video tells us, Githinji’s efforts have led to the opening of 23 collection yards, each of which employs 100 youths in collecting plastic bags.
“I feel great,” says Githinji. “And I feel I’m doing something good for this nation.”
But would it have been better if the Kenyan government had stepped in long ago? Would it have been more efficient if taxpayer money had been poured into dumptrucks and garbage collectors? Would the government have a better grasp on wage rates than Githinji does? Would it be better for Kenyans if the government banned Read the rest of this entry »
Let’s say there’s an apple. I want to eat the apple and you want to eat the apple. Both of us can’t eat the same apple. We can divide it. We can determine who is more hungry. We can figure out who is willing to pay a greater price for it. We can find out who wants the core and who wants the seeds. But no matter how much we deliberate, we cannot share the apple in its entirety.
Economics used to be about how to distribute the apple most efficiently, but the world is changing. Although physical resources remain scarce, human innovation has flourished to the point where we can do much more with much less, and few have bothered to explain how or why.
Arnold Kling and Nick Schulz try to tackle this phenomenon in their new book, From Poverty to Prosperity: Intangible Assets, Hidden Liabilities and the Lasting Triumph over Scarcity. In the book, the authors try to grasp this new way of thinking by terming it Economics 2.0. Where Economics 1.0 saw the market as a means for allocating scarce resources (e.g. apples), Economics 2.0 sees the market as a mechanism for channeling innovation and triumphing over scarcity.
In the beginning of the book, the authors use laundry (of all things) to illustrate the difference. Economics 1.0 would try to explain how it might be more efficient for you to outsource your ironing to someone else. Economics 2.0, on the other hand, doesn’t look at the tangible items in the equation (the number of shirts, the cost of an iron, the cost of dry cleaning, etc.). Instead, Economics 2.0 is primarily concerned with the potential for innovation. For example, what about permanent press? What about wrinkle-free shirts?
As the authors explain:
Thanks to technical progress, many shirts today do not need to be ironed at all. Perhaps in another decade or two they will not need to be washed. Given the likely progress of nanotechnology, there is a good chance that shirts manufactured in 2020 will be ‘permanent clean.’ That’s Economics 2.0.
Another way to look at this is through what Kling and Schulz call the “software layer” of an economy. While Economics 1.0 is concerned with tangible inputs like labor and capital, Economics 2.0 is concerned with the intangible factors, such as collective intelligence, the existence of property rights, and levels of corruption. You can have all of the right hardware for a Read the rest of this entry »
According to Easterly and Freschi, there have been some recent signs of success:
In any other country, such progress might seem ordinary or mundane, but as you probably know, Rwanda has had its fair share of economic turmoil. Most are familiar with the tragic genocide that rocked Rwanda in 1994, but Rwanda’s socio-economic woes have roots that go back much further.
When it comes to the country’s coffee industry, Easterly and Freschi provide a brief history:
The history of coffee in Rwanda is intertwined with the country’s political fortunes, and stretches back to the 1930s when the Belgian colonial government required Rwandan farmers to plant coffee trees, while setting price restrictions and high export taxes, and controlling which firms could purchase coffee. These policies helped create a “low-quality/low-price trap” that would bedevil the post-colonial governments that continued similarly heavy-handed policies.
This poor foundation held the country down for most of the century, but it reached its inevitable collapse after the Read the rest of this entry »