September 5 2013
Carrie L. Lukas
Usually when celebrities talk on causes, they seem as interested in enhancing their image as they are in enhancing anyone’s life. Not so with rock star, Bono. As Atlas Network’s CEO Brad Lips (full disclosure, he’s my brother) writes on Fox News Bono has long been dedicated to helping those in Africa, and has come to realize that handouts alone aren’t going to it:
“Aid is just a stop-gap,” he said at Georgetown University, “Entrepreneurial capitalism takes more people out of poverty than aid…. In dealing with poverty here and around the world, welfare and foreign aid are a Band-Aid. Free enterprise is a cure.”
In the same talk, he laughed and put his head in his hands, “Rock star preaches capitalism. Wow. Sometimes I hear myself and I just can’t believe it!”
As Brad explains, the reality isn’t just that aid alone isn’t sufficient to create prosperity. Aid can actually backfire and become an impediment to progress and cause more problems that it solves:
Think of how food aid can undermine local agriculture markets. Sometimes emergency relief efforts are essential, but food aid often has the effect of destroying the livelihoods of those farmers who have been investing in what could be a sustainable solution to their communities’ needs.
That was the case during a drought in Ethiopia in 2003. Foreign aid programs brought in American corn instead of funding distribution of locally grown food that was actually in supply due to a strong harvest the previous year.
The more well-funded the foreign aid bureaucracy in a given country, the more it distorts the labor market. Instead of becoming entrepreneurs and doctors – professions that solve real human needs – many of the best and brightest in African universities aspire, above all, for a cozy job within a well-funded bureaucracy. After all, that’s where the money is.
Aid programs that rely upon – and thereby empower – the administrative state tend to ossify democratic processes. Rulers like Zimbabwe’s Robert Mugabe have exploited the largess extracted from western donors to undermine political rivals and entrench themselves in power.
Let’s hope that Bono’s many fans are listening to him. Aid programs may sound compassionate, but often actually aren’t. If the real goal is to help people, then those supporting the Africa cause should start cheerleading for capitalism.