As you probably know, I’m a critic of development aid. Why? Well, for one thing (and there are many other things), it’s a massive waste of money. For a taste, let me quote myself quoting William Easterly in an article I wrote a while back on globalization and capitalism (or just skip down to the end of the post for some ideas about effective ways to express your altruistic impulses):

Adebe is an impoverished Ethiopian man. There’s a pothole the size of a Toyota in the street facing his house. He’d like to have it fixed before it devours his bicycle, his dog, or his four-year-old daughter. So what does it take to fix it?

According to William Easterly of the Center for Global Development, formerly of the World Bank, it takes, well, a lot.

In his paper, “The Cartel of Good Intentions: Bureaucracy Versus Markets in Foreign Aid,” Easterly lays out the mind-numbingly complex process. Unlike you and me, Adebe can’t just phone the Division of Public Works, or call his city council member. Fixing his pothole is an arduous, time-consuming journey of Godknows- how-many steps, an alphabet soup of acronym and bureaucracy as lovely as the process of bovine digestion, or sausage production.

It all starts, in Easterly’s words, like this:

Adebe somehow communicates his desires to “civil society representatives” and/or non-governmental organizations (NGOs), who allegedly articulate his needs through the government of Ethiopia (itself dominated by one minority ethnic group) to the international donors. The national government solicits a “poverty reduction support credit” (PRSC) from the World Bank and a Poverty Reduction and Growth Facility (PRGF) from the International Monetary Fund (IMF) … To get loans from the IMF and World Bank, the government completes a satisfactory poverty reduction strategy paper (PRSP), in consultation with civil society, NGOs, and other donors and creditors. The government prepares the PRSP in light of the fourteen-point Comprehensive Development Framework (CDF) of the World Bank . . .

That’s just the kick-off. Then there are more meetings, more bureaucratic hurdles to jump, more reports to file, and many, many more acronyms. The matter of Adebe’s pothole—as provincial as it may seem—turns out to be a massive international affair involving highly paid suits in posh Washington suites.

Easterly continues:

If the international lenders and donors approve the PRSP and release new funds to the national government, then government will allocate the money in accordance with the NDP, ADLI, CRSP, MTEF, CDF, PRGF, PRSC, and PRSP, after which the money will pass through the provincial governments and the district governments, and the district government may or may not repair the pothole in front of the poor person’s house.

Adebe might as well just pray.

The process isn’t cheap, either. The cost of paper-shuffling alone could have fixed Adebe’s pothole many times over. Easterly notes that “it takes $3521 in aid to raise a poor person’s income by $3.65 a year.”

However, it remains quite true that a few extra dollars is worth a lot more to most people on earth than it is worth to you. So you should give, but in a focused way. You should give directly to good causes with a minimum of bureaucracy where your money is likely to have a big effect. Last year I gave to the Fistula Foundation. A very small amount of money can help heal a women with a horrifying injury. (See how you feel when you just read about a fistula, and then think about what it must be like to have one.) I plan to give to them again this year.

Megan McCardle brings to our attention what I think is another good opportunity for giving. One of Megan’s former U of Chicago classmates has set up an educational fund to support the tuition of elementary school students in s single school in his remote hometown village in China. Apparently, $40 is enough to send a kid to school for an entire year. Liang Qiao, who set up the fund, promises that 100% of the money will go to the kids. The kicker is that Liangqiao is dying rapidly of cancer. His lifelong dream was to set up an education fund is his village, which he had intended to do on his own. But since he is going to die soon, he’s asking for our help.

This is an excellent way to spend your money. Investing in the human capital of children in a poor but high-growth country like China is a very good bet. Money given by a local to a single local school is likely to have a concentrated effect with little waste. And dying men, unlike the World Bank, aren’t likely to skim off the top. I am going to send $40. How about you? Will you send a kid to school this year?

(The donation is not tax-deductible, but you’re bigger than that. And if the informality and non-institutional nature of this makes you wary, keep in mind that it is the informal and non-institutional nature of this that is likely to make it effective. If you feel tentative, drop me a line and I’ll forward you the email Megan forwarded to me.)

I was surprised by the international focus of Bush’s speech. And I doubt that there has ever been an inaugural speech that mentions ‘freedom’ and ‘liberty’ more often. (I count 27 instances of ‘freedom’ and 15 instances of ‘liberty’ in the speech). I ardently hope that the universal and eternal longing for liberty will awaken in the breasts of all the world’s billions, and that the flame of freedom will burn bright over every nation, etc., etc., Nevertheless, I found Bush’s bold proclamation of universal liberation somewhat troubling. Whatever he actually means, it sounds expensive and dangerous. That said, I admire the sentiment, and a pledge of solidarity with the world’s oppressed can by itself have a powerful effect.

The striking thing about Bush’s speech is the rhetorical thematic coherence it lends to his entire package of policies. Bush’s vision is one of liberation. Here’s my take on the argumentative structure underlying Bush’s speech…

God gives each person intrinsic dignity and worth, and freedom is required for the full expression of that dignity and worth. Morality requires that we respect others’ intrinsic worth not only by not trespassing against their liberty but also by securing the conditions of the full expression of their human dignity. Furthermore, freedom is interdependent. We are not fully free until all are free. So we must strive for the liberation of those abroad both because morality demands it, and because the full expression of our own freedom requires it. The United States is special because we have, more than any other nation, realized a system of freedom, and thus a system of respect for human dignity. Yet the work of America is not complete. Our system of freedom remains only partial. So we must attempt to bring to fruition the task of devising a system that fully respects the dignity and worth of each individual. The social expression of freedom is ownership, and the fulfillment of the promise of America lies in expanding ownership. We owe this to ourselves. Moreover, we also owe it to the rest of the world, for the American example of freedom is the most powerful force for human liberation.

You’ve got to give it Bush, he’s got “the vision thing.” And it is, on the surface, a coherent and compelling vision. I particularly like the implied idea that we can respect the intrinsic worth of oppressed foreigners by implementing personal retirement accounts. Nevertheless, despite the overwhelming volume of rhetoric about freedom, Bush’s speech paints a picture of a muscular and powerful American state willing to project itself out into the world as a missionary for liberty, which, I fear, does not bode well for liberty at home.

[Update: I think Sullivan says it well:

There were times when the liberty theme became repetitive. And, of course, the relationship of rhetoric to reality is, as always with Bush, problematic. How do you reconcile the expansion of freedom with Bush's expansion of government? How do you square domestic freedom with the curtailment of civil liberties in a war on terror? How do you proclaim that America is a force for freeing dissidents, when the government now has unprecedented powers to detain anyone suspected of terror across the globe and subject them to coercive interrogation techniques that the government will not disclose? Perhaps these questions do not need to be answered in an inaugural address. But they linger in the air, even as Bush's eloquence and idealism lifts you up and gives you hope.

]

I’ve become frustrated with what I’ll call the “forecasting” debate over social security. And my frustration has turned around into an additional argument against the PAYGO system.

It is now clear to me that the forecasting debate works by choosing your favored assumptions about growth, aging, immigration, etc., extrapolating into the future, and then arguing either that we are “headed for an iceberg” or that there is no iceberg, or at least there is no iceberg that can’t be evaded with marginal tinkering.

However, the fact remains that no one knows what the growth rate is going to be in ten years. No one can tell you whether there will be a huge jump in life expetancy due to technological innovation in 20 years. No one can tell you whether President Jeb Bush will usher in a new era of mass immigration. Maybe those fascistic millenials will have six kids per pair!

Whatever the case may be, whether or not social security-as-we-know-it is sustainable depends on a lot of what we don’t know and can’t know. We can and should try to see what the future will look like if certain trends continue, given various different assumptions. Yet, we don’t know how to assign probabilities to the assumptions or to the possible futures. It is likely that some unpredictable exogenous factor will render any such assignment moot.

But frustrations about the futility of the forecasting debate point to a deep flaw in the design of social security: the system is fragile. Brittle, even. The fact that the projected sustainability of social security is so sensitive to fairly small changes in growth rates, demographic change, unemployment rates and is a sure sign that it is extremely poorly designed policy.

Advocates of status quo-ish approaches are stuck arguing that the future’s going to thread the needle of conditions under which the system is viable. Now, I don’t know, and neither do they, whether their favored forecast will become reality. But it remains that a well-designed institution should be robust under a broad range of future conditions. Our PAYGO system just isn’t. Small differences in the rate of growth, rate of increase of life expectancy, and so on, shouldn’t make or break the system. Of course, there is no system that can reliably withstand dramatic changes in any variable. But we should at least aim for a system that is fairly adaptive and robust against moderate changes in growth, population, employement, and aging.

From the NYT:

“We’re talking about rich countries committing 50 cents out of every $100 of income to help the poorest people in the world get a foothold on the ladder of development,” said Professor Sachs, who was appointed to lead the project by Secretary-General Kofi Annan in 2002.

Sachs no doubt understands that “countries” don’t have income. People who live in countries have incomes. So “we’re talking about” the state apparatus in charge of “rich countries” appropriating 1/2% of their citizens’ incomes, and transferring it to the UN, an institution of extremely doubtful moral legitimacy, who will then distribute the money in the form of development aid, a strategy for creating prosperity about as successful as the use of leeches for the treatment of leukemia. Great.

And this is the sort of reporting that is not quite reporting:

Britain itself has pledged to double aid by 2013 to 0.7 percent of its national income. The United States, which currently allocates less than 0.2 percent for aid, has not made a comparable pledge.

It is hard to imagine that the author does not intend us to think, “Why not?”

Why not, indeed. Well, why is the “allocation” of the United States government more significant than the money voluntarily allocated by residents of the United States through remittances and charitable giving to aid efforts? See today’s Cato Commentary by Ian Vasquez.

I’ve begun to think that in some sense the state is parasitic on the cognitive limitations of the media. It’s an old chestnut that the development of science largely involved evacuating magical intentional agents from our explanatory schemes. If something happens, the easiest explanation for humans to understand is that someone made it happen because they wanted it to happen. Explanations are like stories, and convincing stories have characters who do stuff. The media has to tell a story, and the simpler the better. Nation-states, it turns out, are like giant people who can do stuff and make things happen. So if people are mired in poverty, what can be done! Have the League of Magical Giants sprinkle manna on the heads of the downtrodden! This is a story even a journalist can understand. However, the story where millions of individuals give small amounts of money to intermediary institutions, who administer funds to projects helping poor people on the ground . . . well, millions of people isn’t a good character, and all those different charities and institutions doing different things with their bits of money is hard to follow.

So journalists write about magical giants, reinforce the idea of the nation-state as magical giant in the minds of readers, and the individuals of the exploitative political class prosper.

I have only begun to plumb the depths of Cato’s resources on Social Security. In the process, I ran across this excellent paper, “The Moral Case for Social Security Privatization,” by Daniel Shapiro. It turns out that Danny made most of the arguments I’ve been trying to formulate back in 1998. It’s time for this paper to get the attention it deserves.

Here’s a taste:

The most important arguments for Social Security privatization are moral, not economic. Privatization would not be justifiable if it were economically beneficial but morally suspect.

However, a privatized Social Security system meets moral criteria far better than does our current, bankrupt, pay-as-you-go system. A privatized Social Security system gives individuals more freedom to run their lives, is fairer, provides more security, and creates less antagonism between generations, fostering a greater sense of community.

In fact, privatization is defensible not only from the classical 1iberal or libertarian perspective, based on maximizing individual choice and liberty, but from virtually every perspective in political philosophy. Egalitarians, who frame their arguments in terms of fairness, welfare theorists who frame their arguments in terms of economic security, communitarians who frame their arguments in terms of community, and anyone who frames an argument in terms of whether average citizens understand the institutions or programs which they are asked to support, should all support privatization.

I am endlessly amused by Gore Vidal’s claim that the United States exists because Abraham Lincoln had “an early puberty.”

Do I care if Lincoln indulged in man-love? Of course I do! It’s delicious. However, unlike the Jaffaites, it matter not a bit to me whether or not the rumors are true.

I really liked this Jonathan Rauch piece in National Journal. His conclusion:

The 2004 exit polls suggested, to many conservatives, that “moral values” won the election for Bush. It may seem odd, then, that his boldest post-election priority is not abortion or gay marriage or schools, but Social Security. The key to the paradox is that Social Security reform is not, at bottom, an economic issue with moral overtones. It is a moral issue with economic overtones.

That’s right. I’m planning to write a couple longish essays on the moral dimensions of Social Security reform, which I think are far more significant than the immediate economic dimensions.

The strategy of the left is to try to spike reform on the model of the right’s demolition of Hillarycare. The big difference, as far as I can see, is that Hillarycare was popular at the outset, but not because it struck the ordinary Joe as some kind of moral advance, but because it seemed like free stuff. The anti-nationalization coalition I think effectively destroyed that idea that anyone would really get a good deal from it, and, perhaps more importantly, plucked several resonant American moral notes about independence, autonomy, and choice.

It seems that the pro-reform coalition in the present case faces broad skepticism about changing social security. However, other than scare tactics about market Russian roulette, the only moral arrow in the quiver of the left is a dull social democratic conservatism about preserving a moribund social insurance scheme. The case depends implicitly on the rather bizarre and unmotivated notion that taking care of each other means offloading responsibility onto the political class. I don’t think this tune really sings in the heart of Americans, no matter how “populist” the arrangement. The “save the New Deal” trope lost its luster long ago. So I don’t know how well it will fly. The best thing anti-reformists really have going for them is that people are risk averse and are wary of change.

On the other hand, the reformers have a moral message about ownership, independence, choice, and equality that I think may prove popular. A problem for the left in the Hillarycare debacle was that they had no adequately resonant response to the moral argument of the anti-nationalizers (not to mention the practical arguments). I don’t think they have an adequately resonant moral response in this case, either. So their success really depends on their ability to effectively plumb the depths of mammalian fear. Risky schemes! Grandma on cat food! Rapacious moneybag bankers!

I’ve got a new piece up at Reason Online linking the effectiveness of remittances as development aid, Bush’s temporary worker program, and help for the victims of the South Asian tsunami.

Will and Amber and playing a fun game, this is what I got:

Stormy Weather, Jimmy Luxury & the Tommy Rome Orchestra
Options, Pedro the Lion
Highly Evolved, The Vines
Tears Are in Your Eyes, Yo La Tengo
If We Can Land a Man On The Moon Then Surely I Can Win Your Heart, Beulah
Gotta Get Away, The Offspring
Joe #1, Fugazi
Another One Bites the Dust, Queen
We Got the Beat, The Go-Go’s
In Da Club, 50 Cent

How about you?

I’m pleased to see that Brad DeLong has endorsed the general principles of the President’s (still indeterminate) plan for social security reform. DeLong is worried that the President’s proposal will turn into some kind of monstrosity, given Bush’s record, which is fair enough. It seems that DeLong is basically saying that he would endorse something like personal accounts if only it was proposed by a Democratic president. If he is saying that, it’s pretty interesting, given the heated vehemence of his prior attacks on personal accounts and their advocates.