Introduction

This document records comments on the efforts of a forward-looking Christian group, TEAR Australia, to improve the position of some of the world's poorest communities, and suggestions that efforts might be more effective by raising expectations about the poor's prospects.

TEAR's activities appear to reflect state-or-art thinking for NGO's in 2009. For example, TEAR apparently supports :

• small scale community-level projects to improve the position of poor communities;
• programs to create economic opportunities for their further advancement;
• efforts to educate more affluent communities about the issues and on how they can help;
• advocacy in available forum's on behalf the world's poorest.

These comments are based on publications from TEAR Australia to which the present writer gained access in November 2009.  In brief it will be suggested below that:

• TEAR's publications reveal useful strategic insight (ie about where we need to get to), but suggest that its tactics (ie how to get there) could be improved;
• while some elements of the tactical support that TEAR is providing to poor communities (eg help with basic sanitation) will be beneficial, some other tactics (eg artificial 'success' through Fair Trade arrangements) risk inhibiting ongoing progress by affected communities;
• good intentions do not guarantee real progress - and it is possible to make bad situations worse by promoting idealistic 'solutions'. The real-world economic situation is more complex than indicated by the various articles in the TEAR publications;
• poor communities need advice and help from those with knowledge and experience relevant to their technical, strategic and leadership challenges in achieving economic success. Telling them that their problems are the result of global systems that the greedy rich have rigged against them (whilst not mentioning the practical domestic options that would improve their position) is not helpful;
• there are systemic defects in global economic / trade regimes that have received little attention, and might usefully be considered by TEAR in relation to options for improving the position of the world's poorest;
• TEAR seems well positioned to aid many poor communities, and could do so much more effectively by emphasising Christians' true vocation (coming alongside others with practical help and bringing people into the Kingdom of God) and trusting God to have the wisdom and ability to directly govern His Kingdom.

DETAILED COMMENTS

TEAR Documents

These comments are based on articles by: John McKinnon; Jonathan Cornford; Adam Wolfenden; Sue McKinnon; Phil Ireland and Hannah Hancock in TEAR's Harambee: Changemakers Journal, July 2009 and by Lyn Jackson and Jonathan Cornford in the Target Magazine, No 3, 2009. While this is undoubtedly a small sample, it hopefully provides a sufficient basis for analysing what TEAR is trying to achieve.

Strategic Directions

Various articles in TEAR publications identify challenges that clearly require attention. For example, reference was made to:

• the fact that under current international trade regimes, some 60 countries have been steadily getting poorer (Harambee p10);
• (a) the existence of a serious crisis in the developing world (eg rising food prices / hunger) for much longer than that experienced in the developed world as a result of the financial meltdown; (b) the manifest potential for shocks in the current global economic system; (c) the need for a new agriculture (ie one less oil dependent; and featuring better stewardship of soils / water and lower GHG emissions); (d) ecological unsustainability ensures that continuing the present path will lead to mass suffering (eg noting climate change / resource depletion). It was thus reasonably concluded that government response to the financial crisis based on continued consumerism was undesirable (Target p6-7).

Moreover, constructive attempts are made to develop a theological / ethical rationale for dealing with these challenges. For example, reference was made to:

• the futility of excessive wealth, and the disparity between the wealth of Australians and the world's poorest (Target, 2)
• the false belief some have that we deserve wealth, whereas others deserve their fate {Target p3);
• Biblical views of work (Target p5);
• a theology of work - which see it as an opportunity to contribute to God's ongoing creation (Target p5);
• the fact that those who are poor have little scope to make choices (Target p5);
• Jesus' call for Christians to do something different (Target p7);
• a theology of trade (Harambee p3-6) - which emphasises the need to do something about economic injustice.

Good Intentions Don't Guarantee Real Progress

Some elements of the tactical support that TEAR is providing to poor communities (eg in terms of basic sanitation) will be beneficial. However, there are other tactical elements that currently risk unnecessarily inhibiting ongoing progress by affected communities. In particular some of the political / economic policy frameworks that are reflected in Harambee and Target do not seem to represent an adequate understanding of the problem, and what might be done about it.

For example a great deal of emphasis was placed in Fair Trade (Harambee, p18, 21, 25, 28). This involves concepts such as Just Prices (ie the medieval concept of paying people at a level that allows them to live reasonably, rather than at the much lower level that they might gain through 'free' market transactions, Harambee p6) and the notion of a 'Fair Trade Premium' (Harambee p18). Much is made of the differences in economic power between more affluent people and the poorest. However those differences in economic power largely reflect the presence (or absence) in various societies of well developed economic institutions / systems (eg for production, communication, marketing, finance, law, education, R&D, transport, policy / strategy, insurance, industrial relations).

Unfortunately the Fair Trade agenda seems to do nothing about developing these (and, as noted below, writers in both Harambee and Target don't even seem to recognise / mention their importance in their frequent criticism of 'market-based' trade). In fact, by paying people whose national / regional economic institutions / systems are undeveloped artificially at a level appropriate to a moderately developed economy, there is a potential to discourage / impede their development of real economic capabilities at that and higher levels. This probably creates something like:

• the trap of welfare dependency - where modest levels of state support may discourage efforts that have the long-term potential to achieve far more; and
• the trap of artificial governmment 'assistance' services for business in the Australian context which, though well-meant, inadvertently act as a barrier to development of the real economy.

Societies that have achieved rapid catch-up development in recent decades (eg in East Asia) have taken quite a different approach. Their emphasis, through methods for managing change that are quite different to those of Western societies) has been on accelerated development of international-standard economic institutions / systems which allows: (a) their low initial wages to be a source of competitive advantage in accessing export markets and (b) then enables their income levels to rise. Moreover, those societies did not follow the well-intended advice that they were given about developing the labour intensive industries 'appropriate' for underdeveloped economies (a tactic that would have kept them permanently poorer). Rather they created capabilities in industries (ie manufacturing) that at the time were the most highly-productive sectors available to developed economies.

Thus poor communities need advice and help from those with knowledge and experience of how they also can succeed in high value-added activities (eg by developing market economic institutions and systems). The fact that the global economy needs to change direction in various ways (eg because of environmental constraints) alters the industries / methods which poor communities will need to consider, but does not fundamentally change the requirements for success.

Unfortunately those who, lacking information about such technical, strategic and leadership questions, tell the poor that their problem is that the market is maliciously rigged against the poor by the rich (so that the poor can only get anywhere with artificial support) risk doing more harm than good.

There seems to be a general negativity towards 'trade' in TEAR publications. For example:

• Christians in the West were said to be implicated `in injustices implicit in international trading system' (Harambee p3);
• adverse effects of trade were identified (Harambee p8-9) on the UN's Millennium Development Goals (eg eliminating poverty / hunger; improving education; combating AIDS; boosting environmental sustainability of international trade);
• the growth in trade as a proportion of the global economy is suggested to be of uncertain benefit (Harambee p11-12) because 60 countries have been left behind due to: (a) trade distortions that hurt the poor; and (b) problems in trade itself (eg some become unemployed; some start with nothing to trade; and markets only value wants - not needs);
• world trade rules and agreements are geared against poor countries (p13) - and problems remain despite trade negotiations (eg problems with subsidised agriculture; removing manufacturing protection; intellectual property; trade in services). Trade negotiations are dominated by richer countries for their own benefit - and voice of the poor is silenced (Harambee p13-15).
• injustices in trade regimes are the main constraint on the poor, (Harambee p18).

While there are defects in the international trade regime (see 'Fixing the World' below), it is not constructive to highlight failures to benefit from trade without any mention of the institutional / systemic supports that need to be, and could be, put in place to enable currently-poorer communities to compete effectively, .

Further comments on the apparent need to review the policy basis of TEAR's tactical support for poor communities are in Addendum A, while the risk of doing more harm than good by unrealistic good intentions is further explored in Addendum B.

Fixing the World? Some Speculations

There is value in critically reviewing prevailing economic regimes - because: (a) there is no doubt that outcomes have often not been ideal; and (b) there are significant new challenges emerging. However this must be done on the basis of some depth of knowledge and experience of how those systems work, rather than from the 'conspiracy theorists assumption' that any problems must be the result of plots by evil / greedy elites.

Some (undoubtedly inadequate) speculations about what is wrong with mainstream 'wisdom' about political economy were outlined in Competing Civilizations (2001). This referred to; (a) the adverse effect of rich natural resources on local leadership in the development of real economic capabilities; (b) the widespread failure to recognise that economic institutions / systems that are critical to people's ability to compete successfully may not automatically evolve; (c) potential instabilities in financial markets; (d) traditional approaches to foreign aid; and (e) failure to consider the constraints which dysfunctional cultural assumptions impose on a societies' ability to achieve the ongoing change which is critical to economic success.

Furthermore some now-dated suggestions about how the world might be re-ordered to give all a better chance of success were also included in Competing Civilizations (see Defusing a 'Clash"?). The speculated about achieving: (a) more effective democracy; (b) ethical renewal; (c) enhanced cross-cultural communication; (d) reform of the global order; (e) more effective development practices; and (e) a review the role of money. A complementary method to progress reform of global institutions, and simultaneously enable parallel adjustments by individual societies, was suggested in A New 'Manhattan' Project for Global Peace, Prosperity and Security

In terms of genuinely aiding the poor, emphasis on their ability to make system-level changes is critical (ie to create the supports that individuals / enterprises / regions need to be successful) - but highly dependent on cultural traditions. Western societies benefited from their Judeo-Christian and classical Greek heritages as the basis for economic / political development because it enables changes to be made through rational / responsible individual initiative (see Cultural Foundations of Western Strengths). Such changes are not possible with more rigid social regimes (eg those of indigenous Australia or the Muslim world). East Asian traditions allowed systemic changes to be orchestrated by social elites which were effective in creating catch-up production capacity (eg see East Asia). However, as implied in Addendum A, they suffer serious limitations in some other respects which are different to those affecting the Western-style global system (see Are East Asian Economic Models Sustainable?, 2009).

Examples of how a 'building real capabilities' approach, rather than 'criticising the world', might apply in the case of two particular developing economies are in:

• Comparative Development Theory: Indonesia / Australia (2002) - which referred to the sorts of economic institutions / systems that need development, and to the different ways in which various societies have achieved the changes needed to create these;.
• Commentary on Democratic Republic of Congo: Peace Tomorrow (2005) which attempted to address the predicament of a country with a much worse starting position than Indonesia's.

The speculations referenced above are undoubtedly capable of being improved.

TEAR's Tactics

In relation to TEAR Australia's activities it is suggested for consideration that:

• through its grass-roots involvement, TEAR is well positioned to improve the position of many poor communities;
• TEAR should focus on providing simple practical support and on carrying out Jesus Great Commission of bringing individuals into the Kingdom of God, and avoid claiming wisdom about policies for reforming very complex systems;
• while charity has its place, the position of poor communities will be advanced more by information and better organisation, than by being given money;
• poor communities should be encouraged to learn through; (a) education; (b) experience; (c) networking with those elsewhere with relevant knowledge and practical experience; and (d) being open to the guidance God can provide to those in His Kingdom about their particular circumstances;
• TEAR could help by stimulating the creation locally of internationally-networked institutions, which support local community leaders in relation to the practical requirements for developing economic / community / governance systems;
• those with expert knowledge of, and practical involvement in, global economic / trade regimes should be encouraged to propose reforms on the basis of information available to TEAR (eg about the situation affecting particular communities, and the relevant ethical principles available through the Bible), but TEAR should not attempt to pre-empt their conclusions;
• God will play the lead role in the future evolution of the world, and has the wisdom to guide those who are open to receiving it.

ADDENDA

Addendum A: Further Comments on Tactical Assumptions

While the TEAR documents make constructive reference to many emerging real-world challenges, there is a need for more realism in assessing their implications. For example:

• the global financial crisis (GFC) was blamed on 'collective greed - rampant consumerism fuelled by runaway debt' (Target, p6). Whereas those factors were involved, its not that simple. Regulatory errors were made; globalization made it impossible for anyone to properly manage the situation; financial systems became incomprehensibly complex. And non-consumer societies (ie those, such as Japan and China, with export-led development strategies which created a domestic demand deficit that would have led to economic stagnation unless offset by excess demand elsewhere) were also part of the problem because of their 'runaway savings' (see GFC Causes). There are problems where production is not balanced by consumption. For example:
  • a demand deficit in an economy was identified by Keynes in the 1930s as a major factor in the Great Depression (see Impacting the Global Economy);
  • the productive efforts which a community makes tend not to result in material reward, but simply in an increase in the power of the social elites (see Creating a New 'Confucian' Economic World?); and
  • an economy may misdirect resources - because of the lack of consumer signals to producers (see Balancing Supply and Demand?).
• rich countries were seen to have attained their current level of wealth by breaking the rules of 'free trade' - and it was thus implied that a global push towards 'doing as we say rather than as we do' was wrong (Harambee, p7). However:
  • western societies initially rejected earlier mercantilist policies (under which the state was expected to manipulate economic activities) at about the time when Adam Smith wrote The Wealth of Nations, because mercantilism was seen to be inferior to market- based models (under which economic directions were set by profit-seeking enterprises). At that time the mechanisms of a market economy were understood, but that fact that their was no serious alternative available to Western economies did not become apparent until the 1940s when the problem of complexity (and the inability of central authorities to gain the information required to make appropriate decisions) was identified;
  • more recently (ie since the 1980s) market liberalization has been favoured strongly in more developed Western because of the effective catch-up development tactics adopted in East Asia challenged their position in capital intensive manufacturing (which had previously been the sector of highest productivity). That competitive challenge required massive economic changes towards post-industrial economies - which could not be achieved unless political constraints were relaxed. In Australia's case, market liberalization was favoured for different reasons. Many decades of export reliance on strategically unsatisfactory basic commodities and protectionist policies to encourage manufacturing had seen a steady slide in relative income levels up to the 1970s, because of the failure to develop value adding industries when managements focussed on lobbying for government support, rather than innovation to better meet market requirements;
  • this does not imply that simple 'free trade' policies are appropriate because requiring people to compete does not ensure that they have the institutional / systemic support required to do so successfully, and there are methods that can be used to accelerate the emergence of such supports (see Developing a Regional Industry Cluster, 2000 and A Case for Innovative Economic Leadership, 2009). In Australia's case:
    • there is considerable doubt that simplistic market liberalization strategies were the best that could have been achieved (eg see Impact of Economic Liberalism in Australia, 2002; and The Inadequacy of Market Liberalization in Review of National Competition Policy Reforms, 2004). The key points are that: (a) requiring competition does not ensure that individuals, enterprises, regions have the ability to compete successfully in high value-added activities; and (b) when applied to government in an attempt to improve production efficiency in government's secondary role (ie service delivery), competition may seriously impede government's ability to perform its primary function (ie governing);
    • signs have emerged of growing social inequalities as a result (eg long term unemployment; under-employment; homelessness; an underclass). The consequences of this have been (temporally?) concealed by rapidly increasing transfer payments from government - some of which were based on revenues generated by a probably unsustainable resources boom (see The Long Term Impact of the Global Financial Crisis);
  • for the future, it seems very likely that the lack of well developed market economies (ie those driven by profit-seeking enterprises rather than by mercantilist states) will prove a serious obstacle to nations in East Asia (see A Fundamental Problem: Balancing Supply and Demand);
• it was suggested that Global Partnerships for Development (which were part of the Millennium Development Goals intended to address the special needs of least developed countries) should counter the adverse effects of 'free trade' by: (a) discriminatory ('fair') trade; (b) 'south-south' trade - to guard against cheap imports from richer countries; and (c) challenging intellectual property rights {Harambee p9)). The problem with 'artificial' economic arrangements is that this ignores the 'real economy' development tactics successfully adopted as the basis for catch-up growth in East Asia - through providing cheap exports to the developed world. The emphasis on 'south-south' trade in particular appears highly suspect because: (a) cheap imports from richer countries are seldom an issue; and (b) China is possibly promoting 'south-south' trade centred on itself as a means for gaining protection for its unbalanced economy (which richer countries can no longer afford to provide) at the expense of lesser developed regions (see Creating a New International 'Confucian' Economic Order?);
• it was suggested that Jesus' call on Christians to 'do something different' involves (for example) giving money to those who suffer the most (Target p7). Whilst charity has its place, this should not preclude Christians from 'doing something different' in the form of information, and stimulating local economic leadership, which may be more beneficial to poor communities than mere money (as the latter risks merely creating dependence);
• it was suggested that (a) discussing trade raises questions about the structure of the world and structural injustice; and that the wealth of the rich and the poverty of poor are not unrelated (Harambee p2). This is undoubtedly true, but the relationship is more complex.

Addendum B: Evil Outcomes of Misguided Good Intentions

Good intentions that are not supported by a deep understanding of what is required for practical success and the experience / skills to achieve this can actually make complex problems worse.

For example, those who lack insider understanding of how the world works, and develop grand conspiracy theories involving plots by evil elites to explain why things go wrong, can do a great deal of damage. The structural injustice that the poor suffer is largely a product of domestic arrangements and of the failure of those who seek to provide help to do so in a constructive way. Those whose idea of 'helping' is to tell the poor that their problem is that the world is rigged against them, merely mislead the poor and hamper their progress. For example, the Muslim world's prospects appear to be limited by dysfunctional cultural assumptions that inhibit change (eg see About Arabic Thought and Islamic Science) However impractical conspiracy theorists in Western societies have often presented alternative explanations, and extremists in the Muslim world have tended to seize upon claims that their problems are due to 'external oppression' as a rationale for avoiding necessary domestic changes (see Discouraging Pointless Extremism).

This risk of misguided good intentions is also illustrated in another context in Journey Towards a More Effective 'Fitzgerald Inquiry' which referred to:

• the 'failure' a state governments' reform initiatives partly because of unrealistic good intentions. Practical failures by states in delivering public goods and services have since come to be the cause of a great deal of public concern;
• speculations about the church's most effective contribution within society. This suggests focussing on Jesus' great commission (ie bringing individuals into the Kingdom of God); and avoiding unjustified claims of policy wisdom, and
• suggestions that, by simply sticking to the Great Commission, Christians' will make their most effective contribution to helping the disadvantaged to gain justice - ie by encouraging / empowering individuals (including those positioned to develop real-world economic capabilities) to more effectively help one another and (if they are open to receiving it) to benefit from God's realistic and super-human wisdom appropriate to their unique and complex circumstances.