The same principle applies to most other examples of corporate do-gooding. The main cause of Third World poverty is state intervention in the market on behalf of TNCs: 1) land robbery by latifundistas and other quasi-feudal landed oligarchs, in conjunction with Western agribusiness interests; and 2) “intellectual property,” which serves exactly the same cartelizing function in the global economy that tariffs served in the old national economies.

The corporate do-gooders are great at handing out crutches to those whose legs they’ve broken.

On the question of whether ‘dependency’ and ‘self-sufficiency’ are distinguished the way I suggest the obvious candidate I gave is Zimbabwe in which the delightful Mr. Mugabe deliberately destroyed an agricultural sector that exported massively because it suited him to force the country to rely on food aid which he can manipulate.

But anyway, the distinction’s we’re arguing over our fairly narrow (though i still think they’re important). We’ll have to see if they come up again in future threads.

I am saying that the question of “who produces the food, and where do they produce it” is not important, contrary to Mr. McCullagh.

Foreign aid does create problems, and you mention some of them. (Although I’m not sure the distinction you’re trying to draw between what you call “dependency” and what you call “self-sufficiency” makes any sense.)

But the fact that it gives locals an incentive to abandon farm work and seek more remunerative forms of employment is not *in and of itself* a problem. All other things being equal, there is nothing intrinsically valuable about food being produced close to where it is consumed.

That’s fine in a theoretical perfect market where production shifts automatically to reflect the new situation but in the real world it leads to dependencies which are unnecessarily expensive for the west and extremely damaging to development in the third world.

It’s worth noting further that food aid is appallingly bad for pluralism (which is the real thing we should be promoting, rather than ‘democracy’) in that self-sufficiency requires a network of cooperation between producers, distributors and consumers which requires and so strengthens the commitment to property and human rights. When dictators know they can rely on food aid they frequently destroy their own economy because a single external source of food allows them to take control and solidify their power by cutting supply to opponents (North Korea and Zimbabwe are only the most obvious examples of this).

All round I think we should work much harder to educate charitable givers that food aid for anything but the worst emergencies (ie. the tsunami genuinely wiping out productive capacity) is actually a long-term negative to the goals most people have in giving.

To the extent that people freely choose to send food to people in poor countries, there is no inefficiency. The donors are paying for a consumption good (feeling good about themselves or whatever), and markets in the poor country react to that fact by shifting capital away from agriculture to more highly-valued uses.

If people in rich countries are forced to subsidize food shipments to poor countries, then yes, there’s inefficiency. Rich people are paying for nothing more than what could have been produced more cheaply by someone else.

But it is not a problem that markets in poor countries react to these conditions by shifting capital away from agriculture. That is exactly what they *should* do, *given* the stupidity of rich people’s governments. By doing that, they are achieving the most efficient outcome they can–making the best of a suboptimal situation.

If conditions change, and rich people’s governments stop coercing them–or if voluntary donors decide to cut back on their donations–then markets in the poor country will have to adjust. This might be painful, but it’s the sort of thing that happens in markets all the time for reasons that have nothing to do with subsidies. Again, markets would be adjusting to reality in order to make the best of current conditions, which is what they should do.

All of the above is the problem with the common agricultural policy in the EU and its equivalents in the US, and it most certainly doesn’t create prosperity for anyone except the farmers who receive subsidy.

This is protectionist logic. Why does it matter if people in poor countries get their food from non-local farmers? If that’s the most cost-effective way for them to obtain food, then, all other things being equal, that’s how they should obtain food. Local farmers should look for new jobs where they have a comparative advantage. That way social output is increased, and people are generally better off.

Now, if non-local food is cheaper only because non-local taxpayers are forced to subsidize it, then that’s a reason for the non-local taxpayers to complain. But that’s not a problem for the recipients of their coerced largesse.

We should be concerned about creating prosperity, not about ensuring that particular people have jobs providing a particular product.