The End of Poverty: The Economic Possibilities for Our Time: By Jefferey D. Sachs

The End of Poverty addresses the serious situation of global poverty, the main source of the problem, who is the blame, and what can be done to solve the problem. Jeffery Sachs explores several issues in hopes of finding a clear solution. Though one would like to embrace a solution that is quick and effective, that proposes not to be an option. The fact being poverty is long stretching problem that has affected a number of the poorest countries around the world but specifically Africa. More than eight million people globally die each year because they are too poor to stay alive. Also troubling Sachs says, more than 20,000 people died yesterday because they couldn’t afford the basic necessities required for human life.

Sachs describes the three degrees of poverty: 1. Extreme poverty,moderate poverty and relative poverty.  Extreme poverty represents one sixth of the world population or one billion people, who literally fight for survival everyday. 2. Moderate poverty represents 1.5 billion people, who live above the subsistence level but still struggle to make ends meet. 3. Relative poverty as described by Sachs represents 2.5 billion people, mostly in urban areas, who have access to housing, transportation, some education and some nutrition. The numbers of extreme poor have dropped in East and South Asia, but increased in sub- Saharan Africa. When Sachs discusses the possibility of ending poverty in this generation, he describes a main and secondary goal. The main goal is to end extreme poverty by 2025. The secondary goal is to ensure that all the poorer nations begin to make economic progress out of all forms of poverty.

Sachs has criticism for main institutions who have tried to rescue failing economies, namely, the International Monetary Fund (IMF) as well as the World Bank. Sachs belief is that these organizations have tended to represent the interests of creditor banks rather than the poor and have contributed to the problem of global poverty. He encourages a new form of economics called “clinical economics” which he believes will improve the lot of the poor by focusing on each nations specific problems.

Sachs experience in this field have helped nations like Bolivia, Poland, Russia, China, and India to move out of economic chaos. Further criticism is pointed at the United States which gives only 0.15 percent of GNP for aid. Sachs sets a recommendation of 0.7 percent GNP be given in direct assistance by rich to poor nations as a goal to end extreme poverty. Sachs believes not all countries can be helped since some have no commitment to recognized standards, good governance and accountability. He recognizes that the current aid is not sufficient. The current practice is many poor countries pretend to reform while rich countries pretend to help.

Sachs gives six direct assistance solutions which deal with key investments:1.Human capital to improve health and nutrition and skills. 2. Business capital to improve technology in agriculture, industry, and services. 3. Infrastructure to improve roads, power, sanitation, transportation, and communications. 4. Natural capital to improve soils and ecology. 5. Public institutional capital to improve legal, governmental, and police systems. 6. Knowledge capital to improve scientific and technological expertise.

Sachs disregards cultural differences and criticizes fundamentalist Christians as standing in the way of progress. He appears to be a globalist who remains American in outlook. Most Americans believe that all that needs to be done is to pump enough money into poorer nations in order to help them. The truth is money alone cannot end poverty.

Overall I enjoyed reading this book, I think it gave good insight on measures that can be taken to end global poverty.The book did not make me angry or bored. I am optimistic that poverty can be wiped out, but on the other hand I seriously doubt it. There are agendas that don’t include ending poverty. Most-likely the richer countries will get richer and the poorer countries will get poorer.

I think in order to end poverty, it would have to take not one country but several to come together and find a solution. Those countries have to be able to work together and put their differences aside in order to help those in need. It can be done, but there has to be a dedicated effort from all parties involved .Only time will tell if global poverty will be eradicated.

The questions I have for the author would be. Why are some countries left behind while others thrive and progress? Why is Africa one of the hardest hit countries when discussing poverty? Why doesn’t America give more money in global assistance to the poorer countries?

Hoodwinked

by John Perkins

John Perkins tries to explain the emerging problem of ‘corporatocracy’ and ‘predatory capitalism’ through a blend historical events and personal anecdotes. He is a self proclaimed EHM, or Economic Hit Man who has supposedly been in the forefront of multinational corporations exploiting undeveloped nations. While he now feels remorse and guilt for his dark history, he attempts to explain how these multinational corporations weasel their way in to these small nations and proposes some hope for the future. Through his unbelievable life happenings and recollections on encounters with people, both perceivably good and bad, his work really opens your mind up to some new concepts and makes you go..huh?

Mr. Perkins easily gets you in to the mood to start questioning things and quickly starts weaving a tale of an almost James Bond lifestyle. At a young age he got a job for a Consulting Firm and worked his way up the ladder at a fast pace. He starts the intrigue quickly with the story of being confronted in a clandestine encounter with a fellow MAIN (his consulting firm) employee. This confrontation is with an extremely beautiful and seductive lady who swears him to secrecy. She sets up private meetings with him to have sex and ‘train’ him in the ways of the world. His training is to infiltrate political leaders of undeveloped nations and bribe, manipulate and coerce the leaders in to paving an easy path for multinational corporations to come in and set up shop. Basically through loans and austerity the corps come in and exploit, exploit, exploit, basically the same things we learn in Unit 5. He does admit that these corps are bigger than any one nation and that if leaders give them trouble, then the CIA or other large institutions basically kill the rebels or other such means to shut them up (house arrests, military coups, assassinations). While this stuff leads the reader to feel dismay, betrayal and anger, one has to wonder how they could ever fact check what he says. He does a fine job of presenting the facts of scenarios to back up his claims. Perkins goes on to list famous person after famous person that is extremely rich and connects the wealth these people have with the political power they gain through philanthropy and diversifying their affairs. He claims the American people were asleep and that we admired these peoples lifestyles instead of questioning the power they were gaining. He definitely has a Keynesian outlook and frowns on all things free market.

The real meat of the matter came when he started bringing up the toil and wreckage that these corporations leave behind in undeveloped nations and their classification of ‘externalities’. The economic aid that was supposed to strengthen their economies and help the people prosper, basically turns in to helping the corps rip resources from the country cheaply. The climax was his descriptions of Ecuador. Finding huge deposits of oil, Ecuador could have used these profits to help it’s own people. Instead it was privatized, and Texaco came in and got it and destroyed the land and it’s people. Huge pools of oil sitting for decades. Local people becoming diseased from the contaminated water. Animals killed. All for profit. Many costs were never taken into account when Texaco determined the price of oil that we consume. This price, the social and environmental costs are called ‘externalities’.

There are a few chapters of people high positions in dismay at the enormous power the predatory capitalists are gaining and the dismay at what America once was compare to now. The book then shifts forward to the future and Perkins lets us know it’s not all lost. Hope is still there. He attempts to use the second half of his book to explore his solutions of social and environmental responsibility that we consumers have. He insists that we have the power to change the economy and state of affairs with choosing sound purchases that were made in responsible ways. Paying extra is an investment in the future. He also goes in to great depth at how responsible China is how he feels their values of family are much stronger than ours. At the end I felt like his solutions were actually a solution to make his book longer. I think he may have had a little bit of material he wanted to add to his earlier book, but needed to pontificate the end to make it buyable. The first half was really a shocker though, especially to see how premeditated our ‘global’ events are. On a side note, I may have been let down half way through the book, because I perused his website, where it explains how he is a world renowned Shaman and spiritual guide. It took down points in street cred for me.

The book I read for my first book review was “Hoodwinked-An Economic Hitman Reveals Why the Global Economy Imploded-And How To Fix It.” It was written by John Perkins, published by Crown Publishing eISBN 978-0-307-58993-4.

John Perkins is a former self-proclaimed Economic Hit Man (EHM) by way of a consulting firm for the U.S. Government. He has a Bachelor of Science Degree in Business Administration from Boston University.

Perkins writes about the current “mutant” capitalist system that is our current economy, explains how it became  that way and then how he believes it can be fixed. He begins by explaining how he became an economic hit man, the things he witnessed and was even a part of. Having a grandchild gave him a sort-of epiphany about the current condition of the world what kind of world we are leaving to future generations and what prices they will have to pay for our mistakes. He details how the economy has gotten to it’s current “mutant” state, and in the second half of the book explains how he believes it can be fixed.

Mr. Perkins explains how he began working for a consulting firm and was approached to be an economic hit man. He acted as a negotiator with developing countries who had valuable resources that we coveted. His job was to convince these countries to sign for huge debt to have U.S. firms and companies travel to their countries to build the resources, buildings, equipment that was necessary to extract these resources. The problem with these loans is that they were very high interest, and almost doomed to failure. When the countries began to have difficulties repaying these large amounts, the United States then had them hooked….forcing them to provide those resources at a low cost, or lift environmental regulations. This created a large vicious cycle of an economy that was doomed to fail (for the developing countries) and made the rich business owners and corporations even richer.

The effects of these transactions were promised by EHMs to revolutionize these struggling countries, bring them forward and help them thrive and stimulate their own economies. Instead it did quite the opposite, creating conditions where workers were forced to work for lower wages, were still facing poverty, and the environment was being ravaged in the process. The lack of regulations and rising debt to the U.S. allowed the U.S. to monopolize their resources and create a huge inequality.

This basic theory is what Perkins describes as happening in the financial sector of the U.S. economy. When regulations are lightened or disappear, large banks are able to not only monopolize the markets but are almost untouchable because they are so large. If they were to fail, the domino effect that would happen would be devastating.

He explains that our desire to buy things cheap or “1/2” price has driven companies to search for the cheapest way to produce the products but most importantly the best way to translate to large profits for the company. The problem is that the true costs of these goods are not reported. We need to factor in the cost to the environment or to the people, and that should also be considered when calculating the cost of the goods. Accounting for the damages done to the environment would help restore the areas that have been damaged due to production.

Basically, profits have become the main goal of a lot of big business, and this shouldn’t be the only goal. We should not maximize profits while exploiting workers or the environment. There need to be priorities. He refers back to post WWII and how the economy began to thrive with entrepreneurs who wanted to “do well by the stockholders”. Regulations we in tact, and corporations were limited to how large they could get. Once regulations were lifted, the goals shifted to profits.

The second part of the book is the best, and Perkins offers what he believes is a solution. We need to stop blaming everyone else, and actually make something happen. Using China as an example, their optimist attitudes turned their economy around and it continues to grow. Their morals, and response is to do the work and fix the problem. We need to follow their lead in a lot of ways.

First he says we need to have consumer responsibility. We need to support companies that we believe in, even if the goods are more expensive-considering it an investment in the future. If this is done by enough people, the executives will have to listen.

Second we need to create a new economy based on things that we need. Jobs don’t have to be lost only shifted to serve real purposes. Part of that includes the “Green Markets” or stores that provide items that are made locally or at least in the U.S. utilizing our resources, avoiding chemicals, and other undesirable products.

Third is encouraging good stewardship and it kind of goes along with the second one if you ask me. A vendor of one of these green markets would be a great example. We need to honor the people serving REAL purposes instead of idolizing the greedy and the rich. He also talks about adapting an attitude of compassion and protectiveness and how it could make the world more peaceful.

Fourth he talks of new business and government rules and regulations. This goes without saying for me. Tighter regulations and dissolving huge monopolies (like Roosevelt did) would be first on the agenda. Also, making the companies account for those other costs of doing business like the environmental impacts listed above.

Finally he talks of honoring individual passions. Taking the things we are passionate about and figuring out a way to use our skills to be heard. Instead of just making noise, actually doing something about it. The government needs to be pushed and sometimes we need to speak a little louder to be heard.

There wasn’t much that I wish he would’ve included in this book. I was surprised about how much information that he gave, and really believe that his experience has given him great insight as to what a solution might be. It’s also nice to see that he was inspired to make a change and this is his way of doing that.

This book hasn’t really changed my thinking, I knew that there was a lot of economic injustice in the world, it just opened my eyes to how bad things really are with the economy. It has inspired me to explore ways I might make a difference.

My book report was done on Collapse by Jared Diamond. The author, Jared Diamond has taken different approaches to all of his work and collapse is no exception. This book had some great view points on many different ideas about economics and politics. The great writing in this book has helped me choose his to do his other book for the other report.

This book talks about ancient civilizations and how recourses and natural effects can change whether a flourishing nation can make or die off. It talks about how Drought effected more nations then you realized, the Maya, Chaco Canyon, and the Norse settlements all suffered from weather related down falls. These civilizations and there downfall do not really relate directly to anyone of our sections although in a way they relate to all of them in one way or another like the mayans were unable to feed there population due to drought and over paying the rich which to me relates to section five and how the banks just make the rich richer.

overall the book was very good and it was an enjoyable read and i feel as though it was a knowledgable read.

The book-Collapse, How Societies Choose To Fall Or Succeed

The Author- Jared Diamond

ISBN  0-670-03337-5

Published by The Penguin Group

“The End of Poverty, Economic Possibilities for Our Time”, a three-part book written by American Economist, Jeffery Sachs with the purpose of proposing a world without poverty and the examples of “successful” applied steps to developmental economic structures in failing countries. Sachs currently the Director of the Earth Institute at Columbia University starts his book with his first hand experiences and analyses of impoverished countries; where they are going wrong; what could be done to change their situation (thought not going the fullest into detail until later in the book); what economically decent or well off countries have done to become successful; and what impoverished countries could structure or incorporate into their land and economies to promote growth.

 Much of the content in The End of Poverty were past experiences of Jeffery Sachs. My favorite part of the book was chapter five, describing his time participating in the economic reforms of Bolivia during their time of hyperinflation. I also appreciated his testimony over the “shock therapy” of Poland during its transition from a communist ruled economy back into Europe’s economy (Chapter six). Sachs too described, the transition of India, China, and Russia, post Cold War. One thing that stood out to me that I hadn’t considered when looking at global economics was the connection between geography (natural resources to an area: rivers, ocean front, timber, ect…) and economic development. When Sachs went into detail of how England became such a power source of Europe due to their isolation as an island and inexpensive sea trade routs, it put geographical importance into perspective for me.

 The foundations of the book cover problems with current poverty stricken countries, successful practices in the past that have taken countries out of economic turmoil and toward economic development, how to implement “successful tactics”, and on a world level what prospering countries (specifically the U.S.) can do as far as foreign aid to take impoverished countries out of their situations. I walked away from this book with the notion that the main purpose of Sachs book was to argue wealthy countries needed to give more in foreign aid. I guess what bothered me most about this book was the lack of tested hypothesis. If the U.S. or any other wealthy nation is to increase foreign aid, I as a citizen, would like to see a success stories of a small villages in Africa receiving a few million and the response/outcome from such a donation. As en example of an impoverished African village, Sachs uses Sauri and the village’s farmers. Sachs took mention of the village’s agricultural struggles (lack of nitrogen rich soil/fertilizers), Sauri’s poor basic health and sanitation, the village’s lack of transportation and communication, and lack of education. Sachs proposed a village like Sauri could see a turn around on a mere $350,000. What I don’t understand is why Sachs has no tested his hypothesis on the village of Sauri if it’s only going to cost $350k?!

 “The End of Poverty” was content rich, but ultimately failed to produce any believable and realistic approaches to solving the World poverty issue by 2025. His principles and ideas revolved around his experiences helping countries out of turmoil, but when looking at countries like Bolivia and Russia, I wouldn’t exactly call them economic success stories. While they might not be viewed as impoverished countries they both remain corrupt, “second world” countries. Perhaps that’s good enough for Sachs; but it’s not good enough to convince me.

 The Book- The End of Poverty, Economic Possibilities of Our Time

The Author: Jeffery D. Sachs

Important Publishing Information:

            ISBN-10: 0143036580

            Publishing Company: Penguin Books

            Reprint Edition (February 28^th, 2006)

The Book- The Secret History of the American Empire: The Truth About Economic Hit Men, Jackals, and How to Change the World

The Author- John Perkins

The Important Publishing Information–

ISBN#-0452289572

Publishing Company- The Penguin Group

Printing Company- Plume

Copyright- 2007

Websites for further information–

www.penguin.com

www.johnperkins.org

About the Book

What you need to know to start off? The book wasn’t written by someone writing on theory, the book was written by someone who lived the life they wrote about. John Perkins was an “Economic Hit Man”: a smooth talking business man who bribed and strategized his way into deals that benefitted the companies he represented. Realizing the negative implications of his actions, and the actions of others like him, he now writes about the affects that big business has on nations that are struggling to become industrialized. When you are reading this book it feels like you are reading confessions, not only of John Perkins, but the others who came to him with their stories as well.

The book is split up into sixty-five chapters and five sections. Instead of describing the book to you in terms of the chapters I am going to do so in terms of sections, it will get less confusing that way (because the timeline isn’t consistent throughout the book.) The five sections are: Asia, Latin America, The Middle East, Africa, and Changing the World.

Asia

• The work of women. The section on Asia started with discussion of Indonesia and Geishas. What do Geishas have to do with anything? The first two chapters aren’t the only portions of the book that mention Geishas, and other women being used as power plays. But they establish exactly what the women are used for: to gain information, influence, and favor.
• A company’s dirty work. This section also included a chapter entitled “Sweatshops”; a title that explains itself to some extent. This chapter focuses on Indonesia, and Nike’s business practices there: focusing on exploitive practices that do not pay the workers enough for them to live outside of poverty and exhaustion (practices that occurred after Nike claimed they had improved.) Later in the section sweatshops are encountered again on a very real level. It was discussed that the minimum wage had risen, but that hadn’t helped the workers any, because just like the minimum wage, the cost of food was on the rise as well, and unfortunately so was the cost of oil. Which meant that workers often had less than what they had before the wage hike.
• Death in the name of control. Another theme that you will notice that appeared throughout the book is: our government supporting governments in the less developed nations that do not have the best interest of their citizens in mind. East Timber was one of the first instances of this that was discussed. East Timber had just regained its independence (from Portugal) only to have it snatch away brutally by Indonesia. In an action that took the lives of two hundred thousand people, an action not only supported by the U.S. in word, but also in action, as it was the U.S. that provided the weapons.
• Making money off of disasters. In a chapter entitled “Tsunami Profiteering” Perkins discusses how the tsunami of 2004 affected the people of a placed called Aceh (Indonesia) in both a human and economic sense. Before the tsunami the local people formed a movement (GAM), and had been fighting against companies who were taking their resources and not allocating them in a manner that helped the local community. Before the tsunami they had been making progress, after the tsunami with their numbers waining, and the number of military increasing, their progress and movement met its end.
• Money, money, money. John Perkins, as a former Economic Hit Man, seems to be no stranger to the bribery that happens behind the scenes of business deals. At one point he was contacted on how best to bribe people in Indonesia, in a legal sense. Perkins explained methods of legal bribery; most of them involved extra money exchanging hands for services, or sending a young adult to U.S. college for free. But there wasn’t any acknowledged method for legally handing someone a large sum of cash right away.
• Bold conquering. A lot of this book is about what happens “under the table”. As we reach the end of the section on Asia we briefly read about the opposite situation: China and their obvious and consistently present military presence in Tibet. This seems to be to prepare us for future chapters of the book.
• In review. What did we gain from this section? This section provided us with information on the inner workings of big business, and how companies get what they want from people/communities.

Latin America

• The Latin America: full of violence. In the first chapter we learn about the overtaking of a government, and the deaths of thousands of people. We will also find a lot of influence from the United States in this portion of the book. It starts with Guatemala. A company that wished to pursue business in Guatemala, called United Fruits, wasn’t getting what they wanted. So it campaigned against the current leader of Guatemala, Jacobo Arbenz, calling him a communist (during a time when the USSR still existed.) The CIA got involved, and with violence, Arbenz was replace with a dictator. After this occurred thousands of people were killed by a militant government.
• What it was like when Perkins visited: men with guns, would be the best way to describe it. The main point I took away from Perkins’ visit to Guatemala was that there was a certain warfare between the native people of Guatemala (the Mayans) and the current people with power an influence (people trying to make money). Because in order to make money they had to obtain resources that the Mayans held claim to.
• Bolivia, more people exploited. Outside corporations were getting money from native people for utilities. This is another direct experience that the author had; John Perkins, was courted as the main candidate to be president of such a utility company. When he went to Bolivia he witnessed poor people standing in a long line in rain just to pay the company. He also witnessed an amazing project that had been done there, that provided power from the river without damming and flooding, but was told for the sake of money a project like that wouldn’t occur again. He didn’t take the job.
• Venezuela, Hugo Chavez: down and back again. President Chavez did what a lot of men in power wouldn’t do, instead of allowing the country’s resources to be taken with no regard to the people, he put profits back in community to help teach and benefit the people. He also helped other countries within South America when they were in need. This didn’t bode well for the oil industry. Because of this the jackals were called in: jackals are essentially the muscle behind corporations, or the thugs. Chavez was driven out of power, but only temporarily. He came back into power and back into control of the oil, and with his win gave hope to people that things could change.
  
• Ecuador: death and betrayal. The section on Ecuador starts with the assassination of a president, Jaime Roldos. A president who also tried to bring his country’s resources back to its people. His death, an accused assassination, set his country back. Chavez was spreading hope though, so when Lucio Gutierrez seemed to talk the “Chavez talk” he was elected by the people of Ecuador. Unfortunately, his talk was just that, talk. After he was elected he didn’t represent the best interest of his people.
• Another Chavez? We’ve talked about Bolivia before, so I’ll keep this short and sweet.  Bolivia was having issues that a lot of countries were having. They weren’t in control of their resources, companies were, and only the companies were seeming to profit from it: a theme throughout this section. They also had a leader rise up against this practice. This leader being Evo Morales. Of course he was countered, because what he was preaching was dangerous to profits. Evo Morales had a connection to coca crops, and by association cocaine. It was used to attack him, his character, and Bolivia. But those attacks were not successful. With that corporations lost their grip in Bolivia.
• In review. What is important about this section? To me, it shows the lengths that corporations and big business are willing to go to gain control of what we have learned to refer to as the “commanding heights”. It also showcases situation where people have fought back and gained leaders that respected their right to benefit from their resources.

The Middle East

• Lebanon, confrontation that can’t be stopped. Lebanon was one of the places the Palestinians fled when their land was essentially given away as reparation. This created tensions in Lebanon between the pre-existing Christian people and the immigrated Muslims.
• The difficult parts to sort through. This section is interesting to navigate, because it seems like Perkins has less direct experience in the region. It is also fairly short compared to the others. The parts that he does bring from personal experience involve interactions with high ranking business men. Before he was sent to the Middle East he was given a pep talk that is rather striking about the value of Egypt, not only to Africa, but also to the Middle East.
• Egypt, the middle ground. When Perkins was in Egypt he found it particularly difficult to get the population info he needed. So he moved up the chain of command until he could find it. This led him to someone who had studied in the United States, Dr. Asim.  Perkins needed the data to secure money for Egypt. Asim was extremely hostile with him, giving him what he wanted, but brutally tearing him down in the process. Perkins discussed how he felt the source of Asim’s anger was his inability to stop companies from plotting down their own empires onto Egyptian soil.
• Building the Empire. Perkins also discussed a trip he took to Iran. Within this section it is the people he encounters that are the most interesting. Within this particular chapter it was an Iranian engineer, who essentially directly told him what Dr. Asim’s anger had alluded to: that the land and the countries of the Middle East were going to be warped by the intentions of other countries. In this context the engineer seemed to be discussing the countryside turning into a city landscape with hotels and other signs of the outside moving in.
• In review. What was the point of this section? This section was about conflict and shaping. The conflict of the religions within the area was brought up in multiple portions of the section, but especially in reference to Lebanon. To me this discussion of religious conflict existed within this book to show us what was keeping the people from uniting against corporations, and changes, in their countries. The changes were noticed, and seemed to make the people feel helpless, but no actions against it are noted.

Africa

• Jackals in Africa. Here we encounter a friend of the author who became a jackal, Jack Corbin. Jack had a rough start in Lebanon, where Jack’s father lived and worked as a corporate executive. It was in Lebanon where Jack was desensitized to violence. Down the line he found himself in Africa over his head. This occurred when France-Albert Rene did something in Seychelles, an island off the coast of South Africa, that looked a lot like what we have already learned about in the section on Latin America. He attempted to make the areas resources work for the people. Which, as we previously read about, doesn’t end well. Sure enough Jack Corbin was called in to help take him out. The plan however fell to shambles, and turned into a mess of fighting that ended when some of the would-be assassins got on a plane that landed at the airport (in which the conflict was occurring) and flew off. They might not have killed the president, but they seemed to have scared him into being more open to cooperation.
• More on African assassinations. The book paints assassinations in Africa as something that happens commonly. Another assassination that was referenced was the hanging death of Ken Saro-Wiwa and eight of his associates, all who were fighting to protect the environment in Nigeria.
• Does charity work help? The description of the “non-govermental organizations” reminded me of putting a bandaid on a festering wound, and feeling helpful afterward. What I got from the chapter on it is; they are there because they feel they should help in some way, but the things that are being done are just elongating the problem by not providing the right aid.
• Tantalum and other money making resources. Things in the Congo have gotten heated in the battle over resources. Not resources that are useful in any sense to the people, but resources that are useful in making money; things like Tantalum, a resource used in production of all our favorite electronic devices, and diamonds. What is comes down to it they are fighting in Africa because of demands that we have here in the United States.
• In Review. What did this section give us? Most of the themes that we encountered in the book were reiterated within this section. The use of jackals was highlighted within the section, so we learned more about the practices they used, and the situations they used them in. We also encountered how our consumption directly causes violence in regions.

Changing the World

• The most important section in the book? This section talks about what we can do to stop the practices of the Economic Hit Men and the Jackals, or the need for those practices all together. There were four main questions that Perkins put forth that I am going to simplify in my own way. They were; do we believe in our ability to have an effect? Do we really want things to be different? Is the change we want clouded by personal belief, or is it something everyone can stand behind? And, what is it that I can personally do to bring about change?
• Has change been forced before? The answers to the questions, in my opinion, have to inspire great emotions in people to get them to want to work for change, and by extension force change. The author showcases some groups in the last section full of people who seem truly inspired. One of the first he brought up is the Rainforest Action Network (RAN.) RAN was successful in convincing branches of Mitsubishi that are found in America to change their policies on the environment. This represents a big company listening to the voices of people. RAN forces hands a lot by bringing attention to the problem at the source. They target businesses that are a problem and then they loudly inform the people (consumers) of what is going on. That gets attention. There are other ways to get the attention of corporations as well. A group called Amnesty International buys stock so that they can have a say in what goes on. Another group (inspired by Perkins) called The Pachamama Alliance works to help native people get back or maintain their land, and their resources, by providing teaching and means of communication.
• The List, among other things. One of the things I enjoyed about this section is that Perkins considers how daunting this all must seem. He lets us know that he is aware it is scary, but that we have to do something anyway. He has given enough speeches to know that fear is a response. When talking with a crowd about what they can do he encountered a teacher who wanted to know what she could do. He told her to teach and inspire her classes. He also touched on things that we can all do in our lives in his last chapter. A lot of them involve our behavior whilst shopping containing things like; only purchase what you need, don’t shop just for the sake of shopping, use the things you have for as long as possible, and shop at thrift stores, or farmers markets, or even the local mom-and-pop. Some of the things on the list involve behaviors; riding a bike instead of taking your car to places when you can, donate to organizations that are doing things, write to the companies whose practices you don’t like or to the companies whose practices you want to see continue, talk about the problems and issues wherever you can, and vote with the ideals in mind.
• In review. What did the final section tell us? It told us that we can be agents of change. That if we didn’t like what we read we should do something about, and then it gave us options of things we can do.

What the Author wants you to know.

If you were only to read one section of the book the Author would want you to read, “Changing the World”. All of the sections that come before it focus on the corruption of big businesses, and big governments. Their purpose seems to be to inspire the reader to do something. The last section focuses on what we the people can do to battle big businesses and the negative effects they have on other countries. This book seemed to be his call for action, and the fifth portion describes the action he wants to see.

The back of the book contained links to the organizations that were mentioned in the book for their efforts to fight big business and the negative effects caused by it. Here they are if you are interested.

www.amnesty.org, www.dreamchange.org, www.ran.org, www.pachamama.org

Why is it relevant in terms of our class?

Income inequality and standards of living are the two main topics we discuss in this class that are found within this book. Standard of living was one of the main focuses of the book. We’ve talked a lot about third world, or lesser developed nations, but it is hard to put that into context considering the lives that we lead. In the section about Asia the book discussed Indonesia and the living conditions of factory workers there. In the book there is an account of two documentary makers who went to Indonesia and lived on the wages that factory workers make, which meant they were living on a dollar and twenty-five cents a day. They lived in a cement box with no common comforts like furniture, and ate two meals a day. If they wanted to purchase something else they had to take it out of their food allowance. This made an alternative standard of living real. It described what it would be like to go to work after sleeping on a hard floor for barely enough money to eat rice. Income inequality was also mentioned, it was brought up particularly in the case of Lebanon. The Palestinians there were the group that made significantly less on average. During his trip to Lebanon, John Perkins saw slums that the Palestinians resided in. He saw the differences between the groups, like there was some sort of stigma keeping the Palestinians in a lower class within Lebanon.

What I learned.

Before reading this book I didn’t know what Economic Hit Men (EHM) and jackals were. When I was reading I felt quite ignorant. I didn’t think about the native people who were losing their resources to companies that took their profits to other portions of the world. I learned just how important unity is in terms of getting what you want. Countries like Bolivia showed the power of unity in their fight against resource leeches. The section on the Middle East showed what happened if the opposite situation was in affect, if there was no unity. I didn’t just learn about the definition of terms, or about theory, I learned about the “people factor”.

What was missing?

The fifth section of the book “Changing the World” wasn’t powerful enough for me. The entire book was pushing up to that moment, the moment where we learned how we could help. Yet somehow when I put the book down I felt less inspired and empowered than I did when I was reading through the first four sections. Maybe it was because it made me feel a little helpless. The wins that were brought up in the last section seemed trivial compared to all of the damages that were listed in the first four. I also felt that some of the sections, mainly the Middle East and Africa, were lacking the same substance that powerfully drove the chapters on Asia and Latin America. It felt like if the author lacked direct experience he hesitated to write about it in depth, which I can appreciate, but it still affected the buildup. He definitely started out with his strongest arguments and points, which also made the end feel weaker.

How has it changed me?

I will definitely think twice before I go out and buy a Nike running jacket, or a new pair of “Free Runs”. Reading a book like this changes how you feel when you walk into a store, or when you watch the news. You start to think about the source of things more; the “wheres” and the “whys”. Where did my computer come from? Why does Russia want control of Crimea? Last week when I did the grocery shopping I calculated how much it cost for the three meals and snacks that I ate in a day. Then I thought about all the other things I use in a day; my toothpaste, shampoo, conditioner, hand soap, toilet paper, and food for my dogs. Thinking about attempting to live on $1.25, without my bed, or car, just thinking about it was humbling.

The Bottom-line. 

Would I recommend it to my friends? Yes. I have already. And I plan to read John Perkins’ other book Confessions of an Economic Hit Man. His personal experience gave real emotion to the topics he wrote on. I also like his writing style.

Pietra Rivoli is a professor of business at Georgetown University. She earned her B.A. and PhD at the University of Florida in Finance and International Economics (Georgetown University). According to her professor profile on the Georgetown University website, she has a special interest in social justice issues in international business. This is reflected throughout the book by discussing the effects of the textile industry in different parts of the world throughout history from the United States to Great Britain to China. Her book The Travels of a T-Shirt in the Global Economy, published by John Wiley & Sons Inc., has been published in fifteen different languages. In Roger Lownestines review of the book in the New York Times he applauds Rivoli and states “real authors do not write about their subjects so much as they use them to tell a story” (Lowenstein). Rivoli uses her $5.99 t-shirt from a Walgreens sale bin to tell a story that travels across not only the world but time as well.

Rivoli begins her book with the inspiration of her story. She was walking through Georgetown University in 1999 and there were students protesting globalization. The protestor with the microphone yelled “Who made your t-shirt? Was it a child in Vietnam chained to a sewing machine was it a young girl in India earning twelve cents an hour living 12 to a room?”  Rivoli did not know exactly where her t-shirt came from and she was wondering how did this young activist know. That is when Rivoli was inspired to tell the story of a simple $5.99 t-shirt.

The book is divided into four parts and each part contains three chapters. The first part is titled “King Cotton” and begins the story with where the cotton was farmed to create the t-shirt, the Reinsch family farm in Smyer, Texas. The three chapters of this section of the book describes the history of cotton, the business of cotton around the world and the history and current life of the Reinsch farm. Some of the more interesting points provided in this section of the book consisted of he turn that cotton farming took after slavery was abolished in the United States. Once cotton farming started to move west to Texas there was concern about how the farmers were going to be able to harvest their cotton before it was damaged due to weather or not being picked before the end of the season. There was sharecropping and the development of machines slowly overtime but there were a couple of odd things they tried along the way. One of the solutions that they tried was importing monkeys and trying to train them on how to pick the cotton. That didn’t work out so well. Another solution that wasn’t quite as odd was during WWII when the men left to go to war there was a need of help to harvest the cotton. This is when people from Mexico were hired to come and work for the season so the farm could still harvest the cotton and make their profit. These people were called ‘bracer” and even though they were only permitted as an “emergency wartime measure” the program ran well into the 1960s. According to Rivoli, the United States is the leading exporter of cotton. The name of the country to where the majority of the exported cotton goes is considered to be a taboo of sorts: China.

China is where the next stop Rivoli’s t-shirt takes and part two of the book takes place. Part two’s is divided into three chapters. The first discusses how china is the leading exporter of textiles in the world and how the factory that Rivoli visits appears. The second chapter is about what Rivoli describes as the “race to the bottom” which is the history of textile mills and factories in different parts of the world and the treatment of employees that work there. The third chapter discusses the history of the textile industry in the particular factory the t-shirt was created and how other industries such as electronics and cars have effected it. What was most interesting in this section was how it relates to the statements made by the protester that inspired Rivoli’s journey. The protester states that these shirts were made by young girl’s that live twelve to a room making a very little wage. What Tivoli discovered was that the women that work in the textile mills in China like the fact that they work and make their own money. Many women go to work in the mills because it is better than working on the farm or being in a marriage they do not want to be in. The conditions are still very strict but these women feel free at the same time. They use their money to do what they please such as buy a dress or see a show.

The third section of the book discusses the t-shirt coming back to the United States. This is where most of the issues of free-trade and globalization are discussed. There is how the imports of textiles effect the textile industry in the United States. The policies of textile trade are also heavily discussed in this part of the book. Rivoli discusses how policies are constantly changing when it comes to textiles. A shipment of t-shirts coming to the United States might be ok when it is ordered but by the time it arrives some of the items on it might violate trade policies and have to go back. There is so much that effects the textile industry in the United States that people are not aware of because it is overshadowed by other controversial topics in the news. The fact is that the US textile workers were against the importing of textiles into the U.S. because it was taking away their jobs. The problem was that it was cheaper to import the t-shirts and yarn that the women in China made. Those women were also  happy to do it for a fraction of the amount it would cost for a worker in a US mill.

The final section of the book ad most interesting discusses what happens to t-shirts as Rivoli states “toss them out”. She isn’t referring to as throwing them away but what happens to clothes when they are donated after they are no longer needed. After being sorted through a few times by the donation center and other resale shop owners, the unwanted garments are sent to Africa. This section of the book specifically discussed a market in Tanzania where the shirts Americans were willing to pay so much money for are sold for a quarter. The market here is the only time in the t-shirt’s travels to be considered in a free-market. There is no tax or tariffs. The second hand clothes are purchased by sellers and then resold at the market for a profit.

This book was enjoyable. It was easy to follow because it focused on one good throughout the process. One thing I disliked was the way Rivoli talked about consumers. She described the “soccer moms” she saw dropping off garbage bags of clothes to the salvation army as taking out the trash to make room for more stuff they don’t need. I feel that she could have executed this part of her book better. Most people that donate clothes are getting rid of clothes that don’t fit or no longer want. Rather than throwing them away they like to think that they are doing a good deed by donating them so the clothes can be purchased at a lower price by somebody that cannot buy them new. They way she describes the consumers is so negative it is like she forgets that they are the ones that stimulate the U.S. economy. Even though that t-shirt was made in China, the cotton grew in the United States therefore, there is still some stimulation to the economy. Also a young girl in China is living independently rather than forced into a marriage she does not want because someone bought that t-shirt. Consumers do need to be more informed on what their purchases effect but that doesn’t mean people that are informed should look down on the uninformed.

Sources:

Lowenstein, Roger. “Travels with my Florida Parrot T-Shirt.” New York Times 21 Aug 2005,  n. pag. Web. 30 Mar. 2014. <http://www.nytimes.com/2005/08/21/business/yourmoney/21shelf.html?pagewanted=print&_r=0>.

Rivoli , Pietra. The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power and Politics of World Trade. Hoboken: John Wiley & Sons Inc., 2005. Print.

“Pietra Rivoli Bio.” Georgetown University. N.p.. Web. 30 Mar 2014. <http://explore.georgetown.edu/people/rivolip/?action=viewgeneral&PageTemplateID=360>.

             I did my book review on Mis-Measuring Our Lives, by Joseph E. Stiglitz, Amartya Sen, and Jean-Paul Fitoussi. The book is about how the measure of GDP is not consistent enough to measure the well-being of a society.

            There are a few main points throughout the book. There are three chapters. In the first they tell us about why GDP is not measured as correctly as we think. It also lets us know how many things affect it. Chapter two speaks on quality of life. They touch on three approaches on how we currently measure the quality of life. The authors point out the differences, similarities, and weaknesses. Finally three tells us about Sustainable Development & Environment. The term “Green GDP” is brought up, which is ”an index of economic growth with environmental consequences of that growth factored into a country’s conventional GDP.”(Wikipedia)

            The insights that I read through the book related to unit 2. It tells about things like consumption, and the well-being of society. The thing I learned was the term Green GDP. I never knew it existed. I don’t wish anything else was included. I do find the whole topic of the book interesting. I would like to know why they decided to write a book about this. This book definitely changed my thought on how GDP is measured. It also made me think about how the smallest things are accounted for in GDP.

Authors: Joseph E. Stinglitz, Amartya Sen, Jean-Paul Fitoussi.

Publisher: The New Press

ISBN: 978-1-59558519-6

Wikipedia: http://en.wikipedia.org/wiki/Green_gross_domestic_product

Dating 1901, Early Sophisticated Globalization Technologies Were Emerging. This Depiction Illustrates The Ability To Communicate Via Undersea Telegraph Cables Commissioned By Eastern Telegraph Company’s Early Systems.

Globalization: A Brief History

ISBN – 978-0691133959 | Princeton University Press (August 23, 2009)
The book’s two authors, Osterhammel and Peterson, hold professorships -both teaching history- at the University of Konstanz. Elaborating on historical economic policies such as those ratified at the Bretton Woods Conference – the International Monetary Fund (IMF) and the International Bank for Reconstructing and Development (IBRD)- the authors give readers a better understanding of the complex inter tangled web of historical circumstances, giving birth to the events leading up to the “golden-age” of the 1970’s. The reader is urged to think of globalization in terms of a complicated, enduring process rather than a 21st century phenomena. Essentially, the authors present 8 densely succinct, informative chapters, broadening the readers perception of current worldly cultural, political and economic standings.

Touching on topics we’ve studied this semester like intergenerational issues I was able to couple this text with course assigned readings to better understand facts I hadn’t already known. In specific, I better understand the immensely powerful World Bank. More surprisingly, I discovered that the seeds of the World Bank -IMF and IBRD- were planted during a chaotic period of the second World War. I was alarmed to learn that such world domineering systems were established when decision making was inherently skewed, as global domination was imminent.

Briefly discussed in 2 introductory chapters -1. Globalization: A Contested Concept  2. Globalization and History: is Globalization a New Phenomenon?- is a standardized definition of globalization -both past and current. Currently globalization is loosely defined as “the development, concentration, and increasing importance of worldwide integration.” Newly redefined, its current definition allows for an exploration into the history of worldwide integration.

The emergence of globalization is credited to the late Middle Ages of Europe. As globalization talk permeates academic and economic circles, Osterhammel and Peterson introduce to these conversations a historically conscious voice: complete with detailed accounts of policy change and events as seemingly obscure as the introduction of plant and animal species to the Americas, Australia and Africa in the 1700’s.

Later chapters -3. The Economic Dimension of Globalization 4. The Political Dimension of Globalization 5. The Cultural Dimension of Globalization 6. The Ecological Dimension of Globalization- begin to outline the affect of globalization on political, cultural and ecological systems predominately spanning 1750 to 1880. Along with industrialization, this age of imperialism and political upheaval spread throughout the Atlantic world. The northern hemisphere is said to have created networks of traffic, communication, migration, and commerce. Consequently, subsequent economic systems developed, primed for expansion and diversity.

What followed, along with the advent of “heavy-industry” technology, were brief periods of nationalist-driven, industrial revolutions. Free market economies thrived, and experienced violent growth. Nations began to redefine history, newly able to keep score with tallies of war and growth, defined in terms of globalized fiat currency.

Around 1990, a worldwide awareness of the macro process termed “globalization” occurred. Suddenly, complete with global connections, people were aware and “noticed” globalization happening. Osterhammel and Peterson contend that although the discussion of globalization has surfaced popularly as of late, societal systems on a global scale have long been molded by a culmination of its worldly-connected affects.

A thirty year period ensued, described by the authors, from 1945 to the mid 1970’s where, by most accounts, the dust had settled; Proverbial lines were drawn, and nations understood what would be the battlefield for commandment an ever evolving global economy.

Concluding the text in the last chapters -7. Ideologies of Globalization: Market Globalism, Justice Globalism, Jihadist Globalism 8. Assessing The Future of Globalization- readers are implored to take cautionary measure when analyzing such a macro term as globalization. When discussing affects of globalization the authors leave us with these succinctly, well-received thoughts:

“Globalization should not be thought of as an autonomous process, an unstoppable historical movement, and an imperative political necessity. When using such an encompassing term, we must take particular care not to reify globalization and must repeatedly insist that macroprocesses always be interpreted as the result of individual or collective action.” (page 151)

This book has changed my perception of information presented as historical truth. I’ve been made aware that information may be presented in multiplicity, leaving readers with any number of assumptions. In order to draw valuable insight, we must look at subprocesses as intensely as we look upon their convergence, and resulting macroporocess.

The Bottom Billion
by Paul Collier; copyright 2007 by Paul Collier,
published by Oxford University Press, ISBN: 978-0-19-531145-7

           As Collier explains on page 1, of the 6 billion (now 7 billion) people living in the world about 1 billion live in industrially developed nations and the remainder live in ‘developing’ nations. Most of these nation’s economies are indeed growing and developing, some at quite astonishing rates. However, this only encompasses about 80% of the people living developing countries. The remaining 20%, about 1 billion people, are stuck in nations of immense poverty with no signs of growth or positive change around the corner. Every bottom billion country has one thing in common – they fit in to at least 1 of these 4 categories of development trap: the conflict trap, the natural resources trap, the landlocked with bad neighbors trap, and the bad governance trap. Collier asserts that development/foreign aid organizations need to be concentrating their efforts on these most dire cases, because these stagnation traps are almost impossible to break from the inside. Unfortunately, at present bottom billion countries are treated like lost causes; aid organizations try to avoid intervening because projects are more likely to fail, not to mention the huge danger posed by political instability to the employees on the ground.

            An important question to ask is ‘Why should we bother intervening?’ and the answer is the same as it is for why we institute most public policies: for the benefit of our grandchildren. Decades from now those 80% of people in successfully developing nations will have mostly converged with rich society, but conditions in the bottom billion will only continue to deteriorate. Having large zones of economic blight in an otherwise prosperous global economy is begging for disaster. Recent financial crises have shown how failure in one area can ripple out and kneecap everyone. Besides economic considerations, zones of corrupt governance and extreme poverty are cesspools; breeding grounds for drug production, terrorists, and social ailments of all kinds. Furthermore, the longer we wait to intervene, the harder it will be to improve.

            Focusing our aid efforts on those who need the most help is pretty intuitive, but the suggestions Collier makes on what should be done are not. This is because every conclusion he reaches is logically supported by mountains of peer-reviewed data. Throughout the book Collier uses statistical analysis, careful to avoid any possibility of reverse causality, to disprove common oversimplifications expounded by individuals from both the left and the right. Masterfully peeling the onion, Collier whittles away all misleading appearances, leaving only the complicated reality of the situation laid bare. Having successfully identified the problems, he convincingly explains how they can be solved; sadly, his solutions run completely counterintuitive to popular thought.

Conflict Trap

            The conflict trap reflects the proneness of bottom billion societies to violent instability. “Seventy-three percent of people in the societies of the bottom billion have recently been through a civil war or are still in one.” Collier starts by deducing the reasons why civil war happens in the first place. He discovers, shockingly, that although rebel groups often cite their grievances as social concerns like political oppression, ethnic discrimination, and income inequality these problems have no correlation with proneness to civil war. These are just things rebel groups say to get support internationally; “A flagrant grievance is to a rebel movement what an image is to a business.”

           So then what is the major reason? Simple material self-interest; likelihood of conflict increases dramatically in places with low income, slow growth, and dependence on primary commodity exports. With nothing else to lose greed takes hold and rebellions arise whenever there is an opportunity for rebel leaders to forcefully steal ownership of resources for themselves and their group, at the expense of everyone else. To illustrate,

“Rebel leader Laurent Kabila, marching across Zaire with his troops to seize the state, told a journalist that in Zaire, rebellion was easy: all you needed was $10,000 and a satellite phone. He went on to explain that in Zaire, everyone was so poor that for $10,000 you could hire yourself a small army. And the satellite phone? To strike deals with the resource extraction companies. By the time he reached Kinshasa he reportedly had arranged $500 million worth of deals. There have been several cases where international companies have advanced massive amounts of funding to rebel movements in return for resource concessions in the event of rebel victory.”

           Since war is essentially reverse development, war in already low-income, low-growth areas only exacerbates the poverty, as well as creating a whole class of people who only know how to get by as killers for hire. How large is this effect in quantifiable terms? Collier works out a rough estimate of the economic costs of civil war on the global economy at $64 billion. This is not including the social cost on the first world in the form of epidemics triggered by disease prone refugees, terrorist attacks, and drug trafficking. “Ninety-five percent of the global production of hard drugs is from conflict countries.”

            Assuming that we realize that it is in our best interest to help, what are Collier’s brilliant solutions? A combined policy of strategic military interventions aimed at extinguishing conflict, and an international (UN) charter for postconflict countries. Ignoring the political hurdles of getting Westerners interested in committing to military intervention in culturally obscure foreign nations after what happened with Iraq, Collier explains that genuine displays of force are necessary no matter how unpopular – though we are strong enough that they only need be meager:

“Later, when I met up with the diplomatic set, I asked why there were so many peacekeepers in [East Timor]. The answer I got about summed up the problems of foreign military intervention: because it was safe there. Governments that send soldiers to serve as UN peacekeepers are paid $1,000 per individual per month. For some countries that is not a bad way of getting some income from their armies. The imperative is then that soldiers should not get themselves killed, so safe environments such as East Timor are ideal, and risky environments such as the Democratic Republic of Congo are unattractive. Even if troops are sent to dangerous places, they often play it safe. A revealing case is the ragtag United Nations force in Sierra Leone. In 2000 the RUF rebel movement took five hundred of these soldiers hostage and stripped them of their military equipment. Was the RUF such a formidable fighting force? Hardly – once a few hundred British troops arrived a few months later, willing to take casualties, the whole rebel army rapidly collapsed. The UN troops were an easy target because the RUF understood that they would not resist. They were carrying their guns like tourists flaunting their jewelry.”

            Political systems are most fluid right after conflicts; countries can rapidly shift anywhere from (relatively) disastrous to prosperous depending on policy decisions. Postconflict situations are still tumultuous and governments need extra security while recovering – defense budgets always stay high after the war, a strategy which usually backfires big time. Additionally, reformers are often unsure exactly how to achieve their ideals and desperately need a template for guidance. These reasons combined is why Collier recommends that the UN outline a charter for postconflict situations based on what has proven successful previously,

“A postconflict charter should include guidance on behavior by donors and the international security regime. Donors should be committed for the decade, and not just the first couple of high-glamour years. International security forces should likewise be committed for the long haul. In return, postconflict governments should reduce their own military spending – as we have seen, it is dysfunctional. They should have a transparent budgetary process, so that public power does not translate into private profit. They should include opposition groups in power, for example through decentralization. And they should sort out conflicting and confused property claims quickly.”

Natural Resources & Bad Governance Traps

            The natural resource trap is another counterintuitive idea. How does having an abundance of primary commodities (wealth) trap a country in poverty? The culprit is an array of factors: Market boom and bust cycles combined with general underinvestment in profitable projects, exacerbated by corrupt and/or inefficient governments and a phenomenon called ‘Dutch disease’ – natural resources revenues crowd out all other potential export activities like manufacturing, incinerating any possible opportunities for growth. Not to mention governments tend to act irrationally during the boom times;

“During a price boom government ministries, scenting the money available, put in outrageous bids for more spending. In Kenya one ministry raised its proposed budget thirteenfold and refused to prioritize. Probably it reckoned that other ministries were likely to do the same, so behaving responsibly was likely to leave it at the back of the line.”

           This relates to yet another unexpected trend – in bottom-billion resource rich countries, autocracies outperform democracies. This ties in to our unit 4 discussion about capitalists preferring to deal with totalitarian systems. Indeed, it is easier for the corporation to strike a deal with just a couple of guys, bribe them handsomely and still fandangle a fantastic bargain out of the deal. But if this is so, if capital really pays less for resources from autocracies, how can they outperform democracies? In democratic systems politicians are too focused on recouping campaign finance out of the public coffers to bother reinvesting resource revenues in to productive development; autocracies reinvest adequately.

“An abundance of resource [revenues] alters how electoral competition is conducted. Essentially, it lets in the politics of patronage. Electoral competition forces political parties to attract votes in the most cost-effective manner. In normal circumstances this is done by delivering public services such as infrastructure and security more effectively than rivals can. The extreme alternative to public service politics is the politics of patronage: voters are bribed with public money.”

           I’m sure we can all agree, not all democracies are alike. But what is the only thing absolutely necessary to be considered democratic? ‘Free’ elections. This makes sense, elections are a big public spectacle which the media can report on extensively, so essentially elections = democracy. As it turns out, having a system with elections but no checks and balances creates a very lopsided democracy. Lopsidedness is the situation in most of the bottom-billion. Adding checks and balances to the system reduces illegitimate uses of power and makes patronage politics infeasible, allowing democracies to function more efficiently than autocracies. To roughly quantify the magnitude of this effect, Collier uses a scale with 17 unique checks and balances. On average, it only takes a mere 4 of the 17 restrictions for democracies to pull ahead. Every additional restraint after that widens the performance gap.

           Collier makes the point that removing the possibility of patronage politics disadvantages the entire political class, so periodic reform attempts always face strongly entrenched opposition. Similarly to postconflict situations, reformers often have no clear idea what reforms have previously proven successful, so Collier recommends more international charters to act as guidelines. First is the charter on resource revenues, which provides guidelines for every step of the resource extraction process, because there are many opportunities for corruption along the chain of events: 1^st step is transparent auctions. 2^nd is changing contract terms so that price risks created by boom and bust cycles should be carried by the financially sophisticated corporation, not the ill-equipped national government. The 3^rd step is transparent payment of revenues, so the population can see how much money is coming in. 4^th is transparency in public expenditure, so the population can see how much money is going out. Finally there should be some stipulations for smoothing out public spending during resource shocks.

           As you can see, transparency is the most critical element for extinguishing corruption. But no corrupted government will willingly allow anyone to shine a light on them, so Collier requires a tandem charter for democracy which outlines standards to protect the corruption protections, checks and balances. How do we know which of the 17 checks and balances actually make the biggest difference and therefore require the most stringent protection? Collier delivers a great answer in this example from Peru:

“The government of Alberto Fujimori was notably corrupt, so much that the chief of the secret police, Vladimiro Montesinos, who was charged with the task of implementing all the corruption, decided to keep careful records. These records now provide a rare quantitative window on political corruption, and John McMillan of Stanford Business School has analyzed them. His work shows that the Fujimori government set out to systematically undermine each check and balance that restrained it. It bribed members of parliament, judges, newspaper editors, and the staff of radio stations and television stations. If there was a restraint, the government undermined it. The amount it was prepared to pay reflected its view of the importance of each restraint. From our perspective it is not just creepily fascinating to see a system of bad governance on display; it also tells us what is really important in the fight against it. Where the Fujimori regime put most of its money is probably where we should be the most vigilant. While the official constitutional restraints were bought, the regime did not spend serious money undermining them. The newspapers were also bought, but it was the same story: thousands of dollars a month, not millions. Where the zeros rolled on the checks was to buy the television stations. There were ten stations, and the government bought them at nearly a million dollars each per month. This money bought a proper contract – each day the station had to screen its evening news program in advance for Montesinos and make the required changes. So for the government it was the television news that was the vital restraint to control. Was this paranoia? No, it turns out that the government was quite right. We know because the government had only bothered to buy the nine biggest television channels – it decided not to bother with the tenth, a tiny financial satellite service with only ten thousand subscribers. This is how the government fell. Someone leaked a video of Montesinos bribing a judge, and it was broadcast on this one television channel. Protest escalated uncontrollably.”

           The final necessary measure needs to come from the WTO, not the UN. The World Trade Organization was created as a bargaining table for reduction of trade barriers. Apparently this has worked great between developed nations, but not at all for the bottom billion. Bottom billion countries have nothing to offer for leverage in the negotiations, so the western attitude of ‘maximize concessions abroad in exchange for minimum concessions on our end’ really screws them over. Bottom billion countries need duty-free markets for manufactured goods for them to have any chance of overcoming Dutch disease and breaking their dependence on primary commodity exports. To achieve this Collier recommends that the WTO institute a ‘gift’ round before every proper round of bargaining, wherein developed nations reduce their trade barriers to bottom billion nations as charity. His thinking is that orchestrating unreciprocated trade reductions through the WTO will cause developed nations to pressure each other to stay in-step with each other’s charitable concessions, putting no developed nation at a disadvantage.

Where Collier Falls Short

           There is a point in the book where Collier describes how consumer pressure has forced oil companies in to being slightly more environmentally conscious over the years. In particular he discusses how consumers have successfully boycotted companies who refuse to spend the money to decommission old oil wells properly. He goes on to say that such issues no do not matter to the bottom billion and that consumer pressure should be put to something less peripheral. I could not believe he had the gall to say environmental protection was irrelevant, least of all in a book entirely devoted to mitigating future disasters before it is too late! Environmental issues are relevant for everyone, especially economies looking to industrialize. The particular issue Collier discussed, shutting down old oil wells safely, is of utmost importance to the local areas which contain oil, lest they pollute their precious few sources of drinking water. Meaning that issue which Collier so flippantly dismissed is actually critical for much of the Bottom Billion.

           His lack of comprehension of important environmental concepts runs deep. In a world where scientists agree that the industrial activities of the richest 10% alone have already brought us to the brink of another mass extinction, Collier imagines that we can safely continue business as usual all while the other 90% aspire towards our prolific level of consumption. That is not only mathematically impossible, it is downright suicidal. After all, the path of technological advancement we trailblazed and are now bequeathing the developing world is exponentially inefficient; a recent NASA funded study confirms:

“’Technological change can raise the efficiency of resource use, but it also tends to raise both per capita resource consumption and the scale of resource extraction, so that, absent policy effects, the increases in consumption often compensate for the increased efficiency of resource use.’ Productivity increases in agriculture and industry over the last two centuries has come from ‘increased (rather than decreased) resource throughput,’ despite dramatic efficiency gains over the same period.”

           Collier insists that it is critical for bottom billion countries to industrialize for the sake of rapid economic growth; meanwhile, common sense dictates that industrialization incorporate sustainability lest it exceed the planet’s carrying capacity annihilating itself and possibly our species. A major part of the increase in resource throughput problem discussed above is an over-reliance upon large scale extraction of nonrenewable resources like oil and perhaps more importantly metal. Why not tackle all three problems with the same solution – hemp? Hemp is the number one contender for sustainable replacement material for common purposes. It can be grown almost anywhere and is usable to make construction materials like plastic, fiberboard, and concrete, as well as clothing, paper & cardboard, rope, biofuel, paint, varnish, food, and much more. Henry Ford designed a car with a hemp composite frame more resilient than steel that ran on hemp ethanol.  As a bonus effect, hemp is a carbon sink, removing CO2 from the atmosphere. Hemp seems perfectly suited for bottom billion countries; they want to industrialize, but they can’t compete within established markets. So why not build a brand new industry in this incredibly versatile untapped market? Besides, would it not be easier to build a hemp industry from scratch in a place with plentiful cheap labor and nothing else to lose than to initially try to retrofit industrial production of highly developed nations whose capitalists have everything to lose?

           For someone who so masterfully dissects the nuances of how economics and politics interrelate in developing nations, Collier is surprisingly ignorant about how the same subject shakes out back home. I suppose he has to be; everyone has a blind spot, and if he paid attention to massive roadblocks present in reforming our system before it collapses he might not be optimistic enough to do the hard work of deducing detailed, viable solutions for foreign development. Regardless, his unique blindness leads his (still high quality) solutions to merely be a blueprint of what should be done, with zero guidance on how to do it. Oh well, one man can only do so much. But it goes to show why Collier has made no measurable progress in the 7 years since he wrote this book; he definitely failed to get his policy ideas discussed in the main stream public. I know I never heard of the man or his well-reasoned ideas before going out of my way to take this class.

           Let’s get real with what Collier is asking for here – he wants multinational corporations to willingly surrender some of their profits and shares of the market so the rest of the world can develop. What he does not acknowledge is that the corporate system is designed so that their only job is to maximize profit; they would feel excruciatingly punished for doing otherwise, not something they are eager to volunteer for. When Collier advocates that we use government bodies to execute these charters, he fails to acknowledge that the power to influence economic policy has been bought by the corporations and no longer rests within government control in any way but appearances. When Collier in turn blames the general population for their own delusional ignorance and for the lack of political pressure put on real issues, he does not acknowledge that mainstream media as well as the power to construct public educational policy have been bought by corporations as well. With most information sources filtered through the corporate looking glass it is no great wonder that the public is largely ignorant, placated, and distracted, nor can you rightly blame them. Modern America has the same problem as Fujimori’s Peru: plutocrats have undermined our checks and balances in order to become even more wealthy and powerful. The only difference between our situation and that of developing countries is that their corruption is still crude and heavy-handed, whereas corruption in America is more sophisticated, subtle, and systemic. Corporate monopolies are concealed by the free market illusion and our freedom of choice; the wide variety of producers available for the consumer to choose from are ever increasingly being bought up in to singular power structures. No one remembers that their freedom of choice is limited by whoever chooses or restricts what choices are available.One must wonder, who are we to tell the bottom billion nations they must redress their corruption when we have yet to do the same?

Conclusions

           Overall The Bottom Billion was a stimulating read. Collier’s work disproved some common fallacies of left leaning thought, which I am happy to abandon. I have come around to agree with his stance that military interventions can be prudent to prevent unnecessary suffering; the success of British Operation Palliser in Sierra Leone impressed me. Still, I have my doubts that our present government ever has any genuine altruistic intentions about strategic intervention, which Collier’s stance takes as a given. And I believe his charters really would greatly assist development in Bottom Billion countries, so the man’s life work is not a waste, though I will be greatly surprised if he lives to see them enacted.

All quotes are from The Bottom Billion except for the last one, which is hyperlinked to its source.