Ben Affleck was recently in the news promoting this absurd challenge to American consumers. The site challenges people to live on a $1.50 per day for 5 days. The site fails to mention that a $1.50 US will go a heck of a lot further in a poor foreign country than it will in the US. A $1.50 in Beverly Hills won’t even get you a candy bar, but in Cambodia, you could feed yourself 2000 calories of rice a day for 8 days with that much money.
A kilogram of patty rice in Cambodia was going for 1500 riel in November of 2012, and that was after a massive price spike, up from 1300 riel. 1500 riel is worth about $0.38 USD. 160 grams (1 cup) of dry wild rice will net you around 600 calories, 700 calories for white rice. A kilogram contains around 6.25 1 cup servings dry. A kilogram of rice will last a person about two days, providing 2000 calories a day. So basically a person could be completely full and healthy every day for about $0.20 USD.
It’s also important to remember that I’m strictly looking at rice prices. Clearly people in these poor countries eat a variety of foods other than rice, and often grow their own fruits and vegetables. Self-produced foods will have an even lower cost, as the only costs associated with it are the costs of production.
The website Cambodiangecko.com notes that it’s possible to get a shirt for $2.50 US in local markets. I’d wager the price is even cheaper in poor regions outside of a major city. The point I’m making here is that while a $1.50 sounds like it would be impossible to live on, clearly people are not dying of famine or walking around naked from a lack of clothing in these poor countries. Of the few places in modern times where great masses of people did end up dying from famine, 100% of those famines were brought about by government. In fact, governments have managed to kill more people through famine than through war. Mao ended up killing at least 45 million with his collectivization of agriculture. Several scholars have put the number at double that.
The problems of mass famine in Africa can virtually all be attributed to governments. While it is true that some regions experienced a drought that compounded the famines, those periods of drought would not have lead to mass death had the market been allowed to work before the droughts hit. With just a small increase in irrigation resources, the mass famines could have been completely avoided.
While it’s great to “raise awareness” of poverty in foreign countries, special care should be given to point out the root causes of poverty. As always, governments are strictly to blame. Not because they don’t do enough to help, but because they destroy the wealth creation process that would lift the masses of their populations out of poverty. When people are left alone and property rights are respected, poverty vanishes virtually overnight, and droughts become nothing more than a nuisance to be dealt with.
It’s also worth noting that economists familiar with Africa’s problems say foreign aid is destructive to local economies. Dambisa Moyo writes, “I have long believed that far from being a catalyst, foreign aid has been the biggest single inhibitor of Africa’s growth. Among its shortcomings, aid is correlated with corruption, fosters dependency, and invariably instills bureaucracy that hinders the emergence of an essential entrepreneurial class. For Africa to grow in a sustained way, foreign aid will have to be dramatically reduced over time, forcing countries to adopt more transparent strategies to finance development.” Her commentary is straight out of an Austrian school economics textbook.
What you should take two things away with you from this article. One, governments have killed more people than they have saved by meddling in agriculture. To expect the same sociopaths who have killed millions to turn around and save millions is preposterous. Two, foreign aid does not work to solve long term poverty. As the saying goes, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”