The Power of the Poor

I just watched the Free to Choose Network’s new documentary featuring Hernando de Soto, The Power of the Poor. I was going to write a review for, but, since New Zealand is in the middle of nowhere and my copy didn’t arrive until after the program aired in the states, I’ll offer some briefs thoughts here.

The central idea of the program, as in most of de Soto’s work, is that formal titling allows people to leverage their property to take out loans and pull themselves out of poverty through entrepreneurship. The show has some great examples of this.

What I was most impressed with, though, was de Soto’s willingness to understand the reasons people have for opposing his views. Despite being the target of an assassination plot by the Maoist thugs Shining Path, de Soto empathizes with the group’s supporters. Whenever people feel excluded from capitalism, they’ll seek alternatives. For rural peasants whose interests are not served by the state, Maoism seems like an attractive option.

When people do evil things, it is seldom because they have evil intentions. It takes a great man to recognize that is true even of those who would have you killed.

Thanks to Max Borders of Free to Choose for sending me a copy. If I lived in the States and neglected to mention that, by the way, I would be risking an $11,000 fine.

Now That’s Marketing

I’ve been really impressed with the online marketing campaign for Free to Choose Media’s upcoming documentary The Power of the Poor (which features Hernando de Soto and is bound to be excellent; airs October 8 on PBS). They are running a blog contest, with a first prize of $250 plus a DVD of the show. That’s pretty low cost, and is getting them a lot of publicity ’round the free market economics blogosphere. (It’s only open to U.S. legal residents, so I can’t enter.)

They’re also making good use of twitter. I suspect they’re following everyone mentioning The Power of the Poor, and liberally posting links to blog posts. Again, very low cost with the potential to make a big aggregate difference in publicity.

Well done, chaps! It’s good to see such a worthy project getting the marketing it deserves. People need to see this film (including me; anyone know how those of us outside the U.S. can see it?).

Harford on the Poor Going Private

Tim Harford has a great little piece in FT on the poor in undeveloped countries turning to the market to provide services even when there is free government provision:

Imagine that your daily earnings were less than the price of this newspaper. Would you consider buying private education and private healthcare?

Before you make up your mind, here are a few considerations: government healthcare and primary education are free; the private-sector doctors are ignorant quacks and the teachers are poorly qualified; the private schools are cramped and often illegal. It doesn’t sound like a tough decision. Yet millions of very poor people around the world are taking the private-sector option. And, when you look a little closer at the choice, it’s not so hard to see why.

Read the whole thing. It’s a nice antidote to the common assumption that poor people are incapable of dealing with their situation and require government assistance.

Roger Douglas is a Left-Libertarian

Roger Douglas nicely lays out the principles of classical liberalism as they relate to the poor (hat tip: Anna):

Many think that ACT New Zealand is a party for big business. It is a real tragedy that ACT suffers from this stereotype. It is a tragedy because the profile is so out of whack with the reality.

I have spent most of my adult life in the Labour Party. For 21 years I represented one of the poorest electorates in New Zealand. (…)

The goals I have today are the same as those I had when I was in Labour. I am just as concerned today as I was then about poverty. I am just as concerned today as I was then about opportunity. I am just as concerned today as I was then about second class citizens.

But where I have changed is what I see as the cause of second class citizenship.

New Zealand has two classes of citizens. And we have two classes not because the Government isn’t doing enough for the poor, but because what the Government does for the poor denies them choices, destroys the incentives they have to get ahead, and subjects them to political abuse. (…)

I hold the same ideals I always have. In fact, every party in Parliament claims to share essentially the same goals when it comes to welfare. National, Labour, and the Greens are all wedded to the current system. Only ACT has an alternative to the failing status quo.

The problem with the status quo is that it all about power. Politicians control who gets an operation, where kids get educated, and how much superannuation you receive.

I can share the goal of equal opportunity for all, and have a different way of achieving it.


I’m not one for electoral politics, and would certainly never support the ACT party these days, but Roger Douglas is good people and the whole article is well worth reading. Surely he must realise, though, that stupid policy is what government always reverts to. We can’t just complain about policy without thinking about the underlying system which produces it. He has done more than any other politician to improve policy, only to see many of the changes reversed.

If Roger were to accept that coercive government is always going to produce policy which disproportionately harms the poor, his views would be nearly identical to many anarchist left-libertarians. This excellent Freeman article from Charles Johnson, aka Rad Geek, springs to mind (which Mike Gogulski recently read aloud as a podcast):

Artificially limiting the alternative options for housing ratchets up the fixed costs of living for the urban poor. Artificially limiting the alternative options for independent work ratchets down the opportunities for increasing income. And the squeeze makes poor people dependent on—and thus vulnerable to negligent or unscrupulous treatment from—both landlords and bosses by constraining their ability to find other, better homes, or other, better livelihoods. The same squeeze puts many more poor people into the position of living “one paycheck away” from homelessness and makes that position all the more precarious by harassing and coercing and imposing artificial destitution on those who do end up on the street.

I’d love to see Roger Douglas come out as an anarchist.

Quote of the Day: Climate Alarmism Edition

From Will Wilkinson:

Cheap energy is a main source of prosperity. The effort to make the cheapest sources of energy more expensive is, in effect, an effort to ensure that more people are made to suffer longer in poverty. Energy Secretary Stephen Chu’s openness to using tarrifs against countries like China as a “weapon” in the effort to achieve global climate policy coordination illustrates the clear and present danger climate alarmism poses to the welfare of the world’s poor. I’m simply unwilling to trade certain immediate harm to vulnerable people in exchange for extremely uncertain future benefits.

Indeed. I think it’s pretty incontrovertible that global warming is happening and is caused, at least in part, by humans. That’s what the climate scientists say, and they know what they’re talking about. When they talk about the human cost of climate change and the appropriate policy responses, however, they do not have any especial expertise. The cost of climate change will be a function of how wealthy people are. If people have the resources to move away from strongly affected areas and otherwise alter their behaviour to a changing environment, they will be fine. A sucessful attempt to lessen climate change (though I’m not convinced any is likely to be particularly effective) which slows the development of the poorest could very well increase the overall harm of global warming. Environmentalists often worry about the very fact of temperatures rising X degrees, when they should be worried about how this affects people.