Spontaneous Order, Foreign Aid and K-12

(Guest Post by Matthew Ladner)

Annie Lowrey’s NYT magazine article The Future of Not Working is well worth reading. The article describes a Silicon Valley funded experiment with a universal basic income in Africa. Personally I’m skeptical of the notion that human labor is going to become obsolete, and I am even more skeptical of the idea of a universal basic income when we currently stand tens of trillions short on previously made commitments. Nevertheless, this article is well worth reading to the very end, as it contains a powerful insight. With the benefit of modern cell phone banking account technology, this group has been giving aid in the form of small cash payments instead of whatever the aid organizations happen to want to give out. This allows people to work things out for themselves:

The residents of this village had received money in 2013, and it was visibly better off than the basic-income pilot village. Its clearings were filled with mango plantings, its cows sturdy. A small lake on the outskirts had been lined with nets for catching fish. “Could you imagine sitting in an office in London or New York trying to figure out what this village needs?” Bassin said as he admired a well-fed cow tied up by the lakeside. “It would just be impossible.”

Many popular forms of aid have been shown to work abysmally. PlayPumps — merry-go-round-type contraptions that let children pump water from underground wells as they play — did little to improve access to clean water. Buy-a-cow programs have saddled families with animals inappropriate to their environment. Skills training and microfinance, one 2015 World Bank study found, “have shown little impact on poverty or stability, especially relative to program cost.”

All across the villages of western Kenya, it was clear to me just how much aid money was wasted on unnecessary stuff. The villagers had too many jerrycans and water tanks, because a nongovernmental organization kept bringing them. There was a thriving trade in Toms canvas slip-ons: People received them free from NGO workers and then turned around and sold them in the market centers. And none of the aid groups that had visited the villages managed to help the very poorest families.

The article goes on to explain that cash payments have been abjured in aid programs in the past. It would deprive beneficiaries of the “benevolent guidance” of very well-meaning people, and would also require fewer such people. It however seems entirely obvious that the Kenyan villagers in this article know their own needs much better than the distant would-be do-gooder, and that they are far more capable of making good use of resources. All of this very much brings to mind the Douglas Carswell quote (via Matt Ridley):

The elite gets things wrong, says Douglas Carswell in The End of Politics and the Birth of iDemocracy, ‘because they endlessly seek to govern by design in a world that is best organized spontaneously from below.’ Public policy failures stem from planners excessive faith in deliberate design. ‘They constantly underrate the merits of spontaneous, organic arrangement, and fail to recognize that the best plan is often not to have one.’

Education Savings Accounts anyone?

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9 Responses to Spontaneous Order, Foreign Aid and K-12

  1. Greg Forster says:

    I see the analogy you’re drawing, but ESAs are fundamentally better than UBI in a critical respect: UBI leaves the basic systems of poverty in place and merely streamlines the existing process of dividing society into a godlike technocratic ruling class and a dependent subhuman underclass whom the gods would prefer didn’t exist but don’t know how to truly help and don’t have the will (yet) to exterminate.

    ESAs empower people to help themselves by growing their personal and social capital, increasing their ability and opportunity to support themselves through their own work, challenging the gods to recognize their equal humanity and dignity.

    • matthewladner says:

      When I read the article, it seems to me that the beneficiaries of the aid in Kenya are likely doing much of what you describe in the second paragraph of your comment.

      I remain skeptical on UBI but it seems apparent that it is a far better way to deliver foreign aid than previous efforts.

      • Greg Forster says:

        My primary beef is not with cross-national programs but with domestic programs that subsidize generational poverty in wealthy societies. And I can well believe that in some cases UBI is better than the paternalism of global aid agencies – if those are the only two choices we’re considering. That said, I also think the western press is heavily invested in making cross-national programs look much more effective than they are. I’m not saying all aid should stop tomorrow, but our own psychological need for these programs to be seen as already effective is one of the primary obstacles to making them more effective.

      • matthewladner says:

        I tend to agree with your point about generational poverty. The use of medicaid to fund a national crisis in opiate addition for instance is simply the latest cautionary tale on that front. However, the Bossy McBossypants efforts in programs such as AFDC obviously backfired as well by discouraging marriage and work. Earned Income Tax Credit is better…which brings us back to the start 🙂

      • Greg Forster says:

        “Better” but not the fundamental change of direction we need. Subsidizing the opioid Brave New World through EITC wouldn’t be the kind of change that would get me excited.

      • matthewladner says:

        From what I understand the problem with opiates is coming through Medicaid and doc shopping, because the drugs are expensive on their own.

  2. Matthew, thanks for this thoughtful post. I understand and respect your point about simply giving people money rather than trying to direct how they will spend it.
    However, as we’ve found in chartering (and in the GI Bill) and some voucher programs, there is a down, as well as upside to simply handing out cash.
    Some people create incredible schools. Some people rip off the public, enriching themselves and creating lousy schools.
    Abuses are cited constantly and used to discredit, for example, the charter idea (which I have worked on since the late 1980’s), in Minnesota and throughout the country.
    So I think some regulation is vital – but I also recognize the potential – and in some places the fact – of overregulation.
    Thoughts welcome on finding the appropriate balance.

    • matthewladner says:

      Thanks Joe. I don’t know of a choice program whether charter or private that does not involve some degree of regulation and oversight. I do however believe that once choice systems flourish that they can develop a bottom-up system of accountability that is far more robust and decentralized top down version, which continues to exist:

      https://jaypgreene.com/2016/08/12/arizona-parents-put-charter-schools-out-of-business-early-and-often/

      So when the first charter school opens in city X, choice itself may not do much to hold it accountable because the only other option is to go back to the public school you already fled. When you have hundreds of charter schools, new ones opening all the time, the districts actively seeking open enrollment transfers and private choice, well…parents wind up killing charter schools they don’t value with a brutal efficiency.

    • Greg Forster says:

      The number of voucher schools that are a ripoff to enrich the school staff is tiny to nonexistent. The number of district schools that are a ripoff to enrich the school staff is much higher.

      There are no “unregulated” choice programs and never will be (private schools in every state are subject to extensive regulation already even in the absence of choice programs) and we are way, way on the overregulated rather than the underregulated end of the spectrum.

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