NetNews Usenet Archive 1992 #31/NN_1992_31.iso/spool/sci/environm/13749

Internet Message Format | 1992-12-22 | 3.4 KB

Path: sparky!uunet!zaphod.mps.ohio-state.edu!swrinde!gatech!gatech!wa4mei!ke4zv!gary
From: [e-mail] (Gary Coffman)
Newsgroups: sci.environment
Subject: Re: Development policies
Message-ID: <[e-mail]>
Date: 21 Dec 92 16:20:17 GMT
References: <[e-mail]> <[e-mail]> <[e-mail]> <[e-mail]> <[e-mail]> <[e-mail]>
Reply-To: [e-mail] (Gary Coffman)
Organization: Gannett Technologies Group
Lines: 51

In article <[e-mail]> [e-mail] (Steinn Sigurdsson) writes:
>In article <[e-mail]> [e-mail] (Gary Coffman) writes:
>
>  The alternative, of course, is for countries to make themselves attractive
>  for private foreign investment and development. This brings new jobs and
>  income to workers, tax revenue to the government, and a climate of prosperity
>  that fosters other investors, domestic and foreign, to start more businesses
>  catering to the new found flows of wealth.
>
>Ack. This is a gross oversimplification Gary. In the medium term
>indiscriminate foreign private investment can be disasterous
>because the optimum strategy for the foreign investors may be
>to force asset stripping of the local economy to maintain the
>investment which is then abandoned. Now, you may argue that
>in the long run that doesn't matter as long as the capital
>flows in (although I'd argue that it is not always the case),
>but it is irrelevant anyway, as the locals will _percieve_
>an injustice and rebel. Then you either have to abandon your
>investment or back it by force - whether by landing US Marines
>or bribing locals.  This is why people are willing to accept
>less than optimum gross gains in the long term in exchange for
>the inefficiencies of managed economies, the short term pain
>and income discrepancies of pure capitalism have too often been
>too much to tolerate.

It's certainly true that the transistion to a capitalist economy
is a painful one for nations that have been dwelling in a fantasy
world of socialist economics. But like the Arkansas Legislators
who passed a law saying pi=3.0 to make the math easier, bandaids
won't stop internal cancer in an economy. Serious diseases like
communism and other forms of managed economy require strong medicine.
That medicine is often painful and sometimes nearly fatal in the
short term. But it's the only long term path to healthy development.

Sending in the Marines, or bribing local officials, is no solution.
The people of the country must be convinced that the short term pain
is worth the long term gain, or the development effort will fail. It
must have grassroots support, the healing must begin from within. Using
foreign military force is just another form of command economy, this
time with the commands coming from without the borders of the country
involved. Like all command economies, it will ultimately fail.

Bread and circuses have a strong mass appeal that is difficult to
overcome. But the only path that works in the long term lies in
rejecting them. People must learn that their well being is in
their own productive hands and not in what they can beg or steal
from another. Parasites die without a host, and the World Bank is
serving as a convienent host who is prolonging the agony of these
countries.

Gary