January 20, 2008

Highlight Lowlight Cowen 2

Pay it Forward:

In the second part of Cowen’s book, I found chapter 9 to be of the greatest interest for people interested in reading this book. I titled this short essay pay it forward for a reason! People usually want the best for themselves and others around them, and this can even be true for Countries wanting the best for them selves and other countries. Tim Harford made a reference to the IMF and the World Bank in his book The Undercover Economist, which is designed to give money to developing countries. The WB was primarily funded by the United States after WWII for Europe. France was the first recipient; for self-interest the United States wanted to help get these countries up and running for trading partners. The overall goal of the WB is to increase the number of trading partners. In Tyler Cowen’s book on page 187 he wrote “suppose we wish to go out and do the world some good. To get good results we must ask what is truly scarce.” Mr. Cowen then goes on to say “we must ask how people both donors and recipients will respond to incentives.” So the goal is to further look at incentives and what is truly scarce. The WB and the IMF were set up in away to help countries, and I think you can look at it as paying it forward. These organizations were put in place to help countries and individuals in these countries and hopefully in the long run these people will be able to help other countries in need. Mr. Cowen gives facts that Norwegians are the most likely to volunteer, with 52 percent of the adult population volunteer in some manner and giving back to others in their country.

The second big point that I think is important in chapter 9 is begging and receiving. Tyler Cowen thinks that if we give money to the poor that just encourages them to beg. I have had first hand experience with this, in Mexico. The first time I was in Mexico I found it heart wrenching to see young kids begging for money and for at least twenty-five cents they would give you Chicklets in return for the gift to them. These kids sure made an impact on my heart, so I gave one young boy five dollars, and to me that was a Starbucks coffee and I never thought much of it. After walking around the town, a group of older women had caught up to me and were begging for more, because they knew I was the one that gave the money to the young boy. The fact is that there are many starving people in the world and we all know begging is not going to stop. There are many worldly organizations that do charitable type work, that people can contribute too, and have a feeling that their money is actually going to people that need the money.

For the most part I found that the second part of this book was more valuable than the first, Mr. Cowen just approaches economics from a different aspect. Paying it forward would be a way to help start to solve our worlds poverty issues and by doing this lessen the need for people to beg.

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