Coming up short

This text might get longer/shorter or in others ways be reviewed, edited or changed during the next few days, as long as this text stays.

In an interesting article, Why the Ideas of the World Bank Come Up Short, a former economist at the World Bank, Robert E. Anderson, asks why the World Bank has been less successful in the developing countries than expected by its owners and the world community. He says:

For example, economic growth is the most powerful way to reduce poverty, and the World Bank recognizes that a healthy private sector is the only way to increase growth. Thus, the Bank advises poor countries to improve their business environment.

But the World Bank too often recommends the sophisticated policies found in rich countries without seeming to recognize that poor countries cannot successfully implement them. The result is often a worsening of private-sector performance. Instead, the Bank should take into account the institutional weaknesses typical of developing countries: low skills, corruption, and the influence of special interests.

Then he goes on to name a few examples, and finally make a few suggestions for improvement, in short saying that the World Bank needs to allow the laws of the free market to rule over the laws of politicians.

Of course Mr. Anderson gets it right. The World Bank is an institution operated by individuals from developed countries who grow up in free societies of law and order, capitalism, protected private-property and freedom. The views of such individuals on the world are naturally influenced by their own background and environment. Unfortunately, that environment is not the same in developing countries. That's perhaps the source of the World Bank's many misjudgements.

But this could easily be corrected. Like Mr. Anderson says: "Instead, the Bank should take into account the institutional weaknesses typical of developing countries: low skills, corruption, and the influence of special interests." This simply means that a few lines in the World Bank's working-procedure should be changed and the problem is solved. Another issue, not so easily corrected, is the attitude of the opponents of capitalism, free trade and globalization.

The anti-capitalists
The anti-capitalism movement is a collection of many different groups and individuals with many different goals and ideas. However, they have a common goal: To delay, stop or push backwards the process of globalization leading to more open markets and a free-er flow of people, capital and jobs across the globe. The anti-capitalist movement is mostly known for demonstrations during meetings of world leaders, destruction of public and private property in the name of publicizing its agenda, and foamy talk about the poor and how the rich are exploiting them in the name of bigger profits, regardless of the human and environmental cost.

The "intellectuals" of the anti-capitalistic movement silently support the actions of the masses, but officially they preach their cause differently. They talk about "fair trade" as an option to free trade. Fair trade can seemingly not be defined, but an idea of what it's about can be given by quoting the view of the fair-trader on free trade:

Free trade is well hyped today. It doesn't say much about fair trade, though...

Many trade pacts and agreements seem to conveniently ignore social aspects such as the rights of workers, leading to possible conditions like sweat shops, encouraging such low wages that one cannot live on them and forcing children into harsh working conditions. Some of these agreements do not do much to help developing nations, but do a lot to help large corporate profits. Environmental degradation is another concern.

Accountability is a major issue in all of this... It is often the case that large corporations can make profits but socialise the costs (i.e. get the tax payer to pay for any cleaning up of problems). (#)

Of the supposed problems are more or a result of a lack of private property rights and a phenomenon mostly related to the lack of capitalism - namely poverty. But regardless of that, the intellectuals claim the corporations are entirely to blame.

(I won't deny that a company that pollutes the environment and offers children unsafe working-conditions have a fault, but I guess everyone knows the temptation of breaking the law when it's known that there is no police on the way or anywhere in the neighborhood. It's not an excuse, but the temptation is only for the strong to resist.)

The point is that those elements of the World Bank's strategy that cause the many failures of its plans are the elements which the anti-capitalists fight for when they promote "fair trade", namely more worker/working-environment/minimal-wages regulations (while assuming the poor countries have the necessary institutions to impose them) and stricter environmental-codes (while assuming that starving, desperate people care more about rare animal- and plant-species than the whereabouts of their next meal). The voice of the anti-capitalists is a reflection of the weak sides of the World Bank and its strategies.

The world needs more free trade, less of the so-called "fair trade" (a.k.a. regulation-trade), more respect for private property rights and above all more globalization. Everything else is just a direct or indirect delay towards the goal of a unified world market where wars are raged between companies on the free market, but not between governments on Battlefield Earth.