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Viviane Chevallier

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If there is so much aid in developing countries, why poverty is increasing in these regions and the industrialized world?

I'm doing a question for my project. Not only that poverty is increasing in the developing world for the worse, it is increasing in the industrialized world, especially the United States.

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  • Dec 21 2012: Because despite what people tell you, "the economy" is a complex political entity.

    You most likely were taught that growth + free markets = increasing wealth for everyone. The real world simply does not work like this, there are all sorts of complexities simple ideological thinking doesn't like to deal with.

    Always assume if someone is touting "free markets" and "growth" in a magical thinking kind of way that they are clueless and ignorant of how complicated the world really is.
    • Dec 22 2012: It's refreshing to read your post among the others.

      It's not exactly difficult to understand why but in a free market without the haves sharing some of their income the disparity between the haves and have nots will always exist, no matter how much the global economy grows. If the haves first control 9 out of the pie's 10 slices and later on 90 out of 100, they still control 90% of the wealth, disparity has not changed and since poverty is measured by disparity, poverty won't go away either. Working more hours to close the gap doesn't help when the gap is 10 times bigger than your GDP/capita since there simply aren't enough hours in a week.

      Development aid is a way to voluntarily share some income, outsourcing jobs in another, no so voluntarily way (affecting the poorest in the rich countries the most) which is probably rivaling development aid, if it hasn't surpassed it already. Countries like China and India eliminate the free market entirely when it suits them, so they don't have to depend on others to grow, the idea is that if you don't put your resources for sale on the international market you get to use them all, while you would have lost most of them to richer countries outbidding you on the international market and no free trade benefit is worth losing 90% of your resources.
      • Dec 24 2012: " in a free market without the haves sharing some of their income the disparity between the haves and have nots will always exist"
        You seem to have concluded that there is no charity in a free market system. People are definitely charitable in freer economies even when not forced. Contrast how much the billionaires of the relatively liberal economies give (money and personal effort) to charity with how much the billionaires of the controlled economies give.

        "Development aid is a way to voluntarily share some income"
        Voluntary? Not when forced by the government as taxes such as the new Hollande tax that's driving out the rich French.

        "Countries like China and India eliminate the free market entirely when it suits them"
        Both countries started to prosper when they liberalized their economies. As for China's control of its rare earths, I'm not sure that opening up their resources would have made much of a difference: the manufacturing plants would still be set up in China, the Chinese would have been employed anyway.
        • Dec 28 2012: "You seem to have concluded that there is no charity in a free market system."

          I have not concluded this at all, income sharing can just as well be voluntary.

          "Voluntary? Not when forced by the government as taxes such as the new Hollande tax that's driving out the rich French."

          It's a voluntarily act by the country, the voters. Btw, Hollande's new tax rates btw are just a show that affect almost no one because they don't apply to dividends and capital gains and in any case its proceeds do not go to development aid.

          "Both countries started to prosper when they liberalized their economies."

          They were and are very careful about what to liberalize and when.

          "As for China's control of its rare earths, I'm not sure that opening up their resources would have made much of a difference: the manufacturing plants would still be set up in China, the Chinese would have been employed anyway."

          But the Chinese would have been forced to buy back their rare Earths at a higher price than they can currently get them for. A variation on this theme is all the non-recently invaded oil producing countries having a nationalized oil production.
      • Dec 28 2012: "It's a voluntarily act by the country, the voters."
        So, genocide is OK too, as long as it is done by a democratically voted government? You have twisted the meaning of "voluntary" far too much.

        "They were and are very careful about what to liberalize and when."
        Sure, but, the more they liberalized, the more the people prospered. As long as it is done with respect for property rights, people prosper. The other extreme of liberalizing is communism, which does not recognize private property at all.
    • Dec 24 2012: Spoken like someone clueless about free markets. Free market principles never guaranteed growth. Your claiming so is a straw man argument. Controlled (Keynesian) economies were created with the explicitly stated purpose of guaranteeing growth and avoiding crashes. Do open your eyes to the causes of the recent crashes.

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