Chapter eight of this book was particularly intriguing to me. Once again, this was intriguing to me not necessarily because it was new information but because of the way it seemed to stick out in its applicability to my (and your) life. Chapter eight surrounded its focus around why surface explanations of poverty produce solutions that merely scratch the surface on the problem of poverty. It’s becoming relatively well known that simply dropping bags of rice and clean water from helicopters definitely does not solve the problem with poverty. So we as a society are beginning to look a little closer and beginning to build so called “sustainable” programs that societies can use to build and grow on. For instance, rather than giving an impoverished tribe a chicken and having them kill it for food, we teach them how to use the chicken to have eggs which is more sustainable and long lasting. Good idea. However, as Harford explains, a corrupt government that comes in and takes the chicken for itself will kill the sustainable program either way. A society, no matter how good its business structure initially is, will fail if the government fails to act with some resemblance of integrity and instead encourages bribery incentives, political plundering and overall greed by a select portion of the population. In short, the key to killing poverty is to kill the corrupt government.
Now here is why I was particularly interested in this subject. Harford uses an analogy from biology of how a corrupt leader might stay in power. Simply put, the leader pacifies his support group through giving them what they want even if it costs the rest of society. In the case of the African countries that Harford studied, the leader would accomplish this through allowing his support group and elected officials to ruthlessly steal anything they wanted from the rest of the people in the country. The only requirement was that the leader took a small portion of the plunder. Sadly enough, this seems oddly reminiscent of some new I read today.
This afternoon I opened up my internet browser to the headline “Bernake to cut Fed rates once more.” As good as this may sound, cutting the Federal Reserve rates only increases our country’s vulnerability to inflation. At a time when housing prices are ridiculously over-inflated and oil is higher than ever, our federal reserve chairman continues to cut rates not to help you and I but to satisfy the foremost suppliers of money the government; the financial sector. I’m sorry but this is too similar to the exact corruptions that Harford explains about the impoverished countries. I think that we as Americans are rather naive of the fact that corruptions and selfish interests are actually at work inside our government and it’s robbing us of the ability to excel and compete on the global scale like we ought to be. End rant!