International Soup Kitchens

By Chalcedon
November 20, 2002

Pretty much everyone, if asked, would say that it would be nice to see poor nations made better off. The real debate centers on how that is to be accomplished. Should we focus our efforts on changing the institutions in poor nations that prevent growth from occurring, like the culture or the government? Or should we simply transfer funds to those nations through charity or foreign aid? Often, it is some combination that would have the greatest effect.

With individual assistance, a soup kitchen approach — handouts with no conditions — is sometimes appropriate. However, deeper involvement to induce changes in personal decisions is likely to produce more lasting change. It would be an oversimplification to state that the soup kitchen approach is favored more by those on the political left, while the right prefers to search out and deal with those patterns of life that produce poverty. Yet there is perhaps a valid distinction to be made between the left's focus on distribution and the right's focus on production. This is as true for international assistance as it is for individual charity.

Christian charity makes use of both distribution and production, though it seems that encouraging production often gets the short shrift in policy discussions. As an example, some Christians have been promoting changes in the World Bank and the International Monetary Fund that would set up the international equivalent of soup kitchens for poor nations. This would not be problematic per se, except that the approaches these Christians advocate would actually diminish production and plunge these nations deeper into poverty. At the same time, some of the recommendations involve outright theft.

One of the proposals, promoted by an organization called The Jubilee Movement International, involves debt cancellation for poor nations. (Incidentally, I prefer the term "poor" nations to "developing" nations because "developing" implies that these nations are making actual progress, which, in some cases, just isn't true.) Ryan Beiler of Sojourners Magazine has expressed his support for the Jubilee Movement's ideas. He says that "a great injustice is being visited upon those impoverished nations that are being forced to pay back insurmountable debts." Both the World Bank and the IMF lend money to poor countries, meaning that when the debts go unpaid, the taxpayers in member nations ultimately cover the losses. Because tax revenues are not endless, a greater rate of debt forgiveness means some reduction in the funds available to lend.

In personal lending, the possibility that an individual will declare bankruptcy and fail to repay the loan means the lender must place tighter restrictions on lending — either requiring a higher interest rate or making it more difficult to acquire the loan in the first place. In a charitable situation, the lender might require certain lifestyle changes of the needy borrower. When confronted with a risky potential borrower nation, or a delinquent borrower nation, the World Bank and the IMF often start requiring changes in that nation's policies. Those who favor the soup kitchen approach to international aid recoil at the idea that conditions might be placed on the needy borrower nation. Jen Waters, writing in the November 2002 Intercessors for America newsletter, reflected this point of view: "They [the World Bank and IMF] determine the policies of a country by imposing conditions known as 'structural adjustment programs,' which often times coerce countries to promote sweatshops, export to rich countries and expect high-return cash investments." Waters quotes Beiler, who complains, "These programs often force cuts in social spending, raise taxes, privatize government services, and lower labor and environmental regulations in ways that the people in those countries would never choose democratically."

The leftist perspective shows through here — Beiler is aghast at the prospect that government might be downsized or regulations erased. But it is more than a political bent; the comments betray an antagonism to the most basic ideas of economics. It is baffling that exporting to wealthy nations should be considered harmful. If this were the case, then the oil export restrictions imposed on Iraq should have produced greater wealth there, rather than mass deprivation and hunger. We would blockade only those nations that merit our greatest favor. Never mind that the imports of tools and equipment, medicines and consulting services that poor nations need can only be purchased with exports. Also, Beiler's comment on democracy is enlightening. Apparently, the people of a nation should be able to make decisions with no regard for the limitations of available finances. Vox populi, vox dei, and since God is not constrained by resource scarcity, neither should a deified democracy.

Actually, in many cases this discussion is entirely theoretical, since the borrower nation is a dictatorship. Answering objections to the idea that dictators can obtain funds through the World Bank or IMF, a Christian who is a 20-year veteran of the World Bank professes hatred of dictators. "None of us saw that dictatorship was consistent with solid economic development. Nonetheless, the Bank has lent a lot of money to dictatorships in the hopes of trying to make things better for the poor in those countries and to have the ability to influence the government in the right direction." Perhaps we are not remembering accurately the usual behavior of petty dictators. Do we really want to lend funds to dictators so that they can buy off friends with half the money, stash the other half in Switzerland, then stick their citizenry with the debt? Will this make life better for the poor?

Those who want to turn the IMF and the World Bank into international soup kitchens are missing a vital part of any charitable endeavor. It is bad enough that these organizations use funds taxed away from me, particularly to fund oppressive regimes. Do we now want to erase any hope that these organizations might occasionally nudge a nation ever so slightly toward an economic system that promotes prosperity?

Topics: Culture , Economics, Government, Socialism, Statism


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