Tuesday, May 19, 2009

Aid,trade policies and ways to solve it.

Picture this, A village in a developing nation has serious hunger problems. They are desperate for any kind of help at all. In steps a western celebrity who helps an "aid" group give that village free food. Now this village is stuffed and has a surplus of food. Everybody is happy, right?



Wrong. That free food just caused a farmer to incur high debts because of the lack of sales from his crops. I mean who can compete with free food? Imagine you set up shop in the middle of Las Vegas selling gambling machines at $1,000 a machine and you're going along just fine until every other competitor starts giving them away. Who's going to buy your machines? Nobody. So you lower your prices to extreme levels and finally you're losing money and incurring high debt from the government. This is exactly what happens to that 3rd world farmer who gets bumrushed by free food. While it's great for the rich farmers of the developed world, it's horrible for the guy in Congo who now has to either totally re-think his farming methods and try and plant new crops or just go out of business.



Won't people starve if they don't get the food they need? Well, the answer is no shit sherlock, this was never in question. What was in question is why we need to dump 1st world products on 3rd world people. The answer is we don't. Many countries were extremely self-sufficient using government policies to feed their own people. For example, Haiti was once a self-sufficient country. Now they import over 80% of their rice. What was once a country that produced nearly all of its rice, now imports 4/5ths of its rice. Why is this, you might ask? Well Haiti was forced to cut import tariffs from a grand whopping 50% to just 3%. 3%! Obviously this is going to lead to massive importations of rice which would then lower the cost of locally produced rice and ultimately cutting off local rice production period. So onto the solutions......



First of all we need to stop making trade a zero-sum game. You wonder why the leftists think of it as a zero-sum game? Well look above. When you try and force other countries to open their markets, you should give in return. fruthermore free trade should actually be fucking free. This means no subsidizing your rice as you won't allow that for other nations. Then we must get onto the fact that when countries are in crisis, we should always try and help, but make sure you're stimulating the local economy over Iowa's economy. Buy rice from the locals and give it to the people in need. pretty fucking simple, no? How does it make any sense to buy foreign food to help the local economy? This is as fucked up as when you hire foreign corporations to build schools in Iraq. HIRE LOCAL WORKERS FOR FUCKS SAKE! If the goal is to allieviate poverty while also stimulating the local economy, then these 2 simple solutions will go a long way in doing that.

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