Singer v.s. Van der Vossen:

Singer asks, if it’s obligatory to save the drowning child you happen to encounter at the expense of your shoes, why isn’t it obligatory not to buy the shoes in the first place, but instead to save a child in equally dire straits?

As a profession, we are in an odd but unfortunate situation. Our best philosophers and theorists develop accounts of global justice that are disconnected from the best empirical insights about poverty and prosperity.

Reading these theories, one might think that our best prospects for alleviating poverty around the world lie in policies of redistribution, foreign aid, reforms to the international system, new global institutions, and so on. And one might think that markets, property rights, and economic freedom are at best incidental, and more likely inimical, to the eradication of global poverty.

Such ignorance, if not denial, of the empirical findings about development and growth is irresponsible.

Bas van der Vossen

The article he is quoted in goes on to explain:

Mainstream development economics, in a nutshell, holds that the poverty is an institutional problem. More precisely, poverty is human being’s natural state. Poverty is normal and does not need to be explained, but wealth does.

The main reason some nations are rich and others poor is not because some nations have better geography, better natural resources, or better genes. Rather, rich countries are rich because they have better institutions. Rich countries have institutions that incentivize growth and development.

These institutions include strong private property rights, inclusive and honest governments, stable political regimes, a dependable and inclusive legal system characterized by the rule of law, open and competitive markets, and free international trade.

Poor countries have institutions that fail to incentive growth and development, and often instead have institutions that encourage predation. These countries have weak recognition or active disregard of property rights, exclusive and dishonest governments, instable political regimes, undependable legal systems characterized by the capricious rule of men rather than the rule of law, and closed, rent seeking, crony capitalist markets, or few markets at all, and little international trade.

Overall, we are not against charity. We accept that charity is good on the margins. We both give money to various charities.

But to focus on charity as means of fighting poverty is misguided. Mainstream development economics holds that that international aid and charity tend to do little good overall, and tend to do as much harm as good.† ...

As a profession, we are in an odd but unfortunate situation. Our best philosophers and theorists develop accounts of global justice that are disconnected from the best empirical insights about poverty and prosperity.

Reading these theories, one might think that our best prospects for alleviating poverty around the world lie in policies of redistribution, foreign aid, reforms to the international system, new global institutions, and so on. And one might think that markets, property rights, and economic freedom are at best incidental, and more likely inimical, to the eradication of global poverty.

Such ignorance, if not denial, of the empirical findings about development and growth is irresponsible.†

We share van der Vossen’s concerns.

Mainstream development economics, in a nutshell, holds that the poverty is an institutional problem. More precisely, poverty is human being’s natural state. Poverty is normal and does not need to be explained, but wealth does.

The main reason some nations are rich and others poor is not because some nations have better geography, better natural resources, or better genes. Rather, rich countries are rich because they have better institutions. Rich countries have institutions that incentivize growth and development.

These institutions include strong private property rights, inclusive and honest governments, stable political regimes, a dependable and inclusive legal system characterized by the rule of law, open and competitive markets, and free international trade.

Poor countries have institutions that fail to incentive growth and development, and often instead have institutions that encourage predation. These countries have weak recognition or active disregard of property rights, exclusive and dishonest governments, instable political regimes, undependable legal systems characterized by the capricious rule of men rather than the rule of law, and closed, rent seeking, crony capitalist markets, or few markets at all, and little international trade.†

To be inclusive, economic institutions must feature secure private property, an unbiased system of law, and a provision of public services that provides a level playing field in which people can exchange and contract; it must also permit the entry of new businesses and allow people to choose their careers.†

Now, not every development economist shares Acemoglu and Robinson’s exact views. But their general position — that private property, markets, and economic freedom — are needed for sustained growth is the mainstream view.

To be clear, we are not saying that mainstream development economics calls for libertarian politics at a domestic level. Economists have varying positions about the degree to which governments can and should correct market failures. They also have varying positions about the extent to which countries should provide social insurance to their citizens.

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Our view — consistent with development economics — is that first-worlders’ willingness to buy DVD players and iPhones, not their desire to donate their income, is that thing that actually makes the bigger difference in fighting poverty.

Taiwan and South Korea grew rich and became First World countries, not because of handouts, but because they produced and sold luxury goods (on the broad definition of “luxury good”) to the First World.

But, as far as we can tell, they talk this way because they are ignorant and/or misinformed about the relevant empirical work. Philosophers disagree with economists not because they have read and discovered serious flaws in the economists’ work, but because philosophers have for the most part just ignored development economics.

Philosophers are of course free to disagree with mainstream development economics, but they bear the burden of proof of refuting it. We do not bear the burden of defending it here

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But in the long-term, we’ll shut down the very economic system that made the First World rich. The Third World doesn’t need to eat our success — they need to emulate

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Second, the history of food donations is fraught with peril. Donating food to the Third World sometimes alleviates a famine — it is sometimes the thing to do in an emergency.

But, more frequently, first-world food donations just put Third World farmers out of business, and make them dependent on donations in the future.†

Again, the consensus in development economics is not that the Third World needs us to give them grain, but, on the contrary, that the Third World needs our governments to stop subsidizing grain production in the first world, so that we First Worlders instead buy our grain from the Third World.