August 16th 2014

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Articles from this issue:

CANBERRA OBSERVED High noon for 'End of Entitlements' Joe Hockey

FOREIGN AFFAIRS Australia should help Iraq's besieged Christians

INTERNATIONAL AFFAIRS Locking up the dogs of war: huge decline in war-related deaths

WORLD WAR I The Great War at 100: Revisiting The Guns of August

EDUCATION 'Safe Schools' scandal: Open letter to the education minister

NATIONAL AFFAIRS Govt minister attacked for comments on cohabitation

EDITORIAL Baby Gammy case highlights weakness in surrogacy laws

NATIONAL AFFAIRS Web of criminality unveiled by royal commission

NATIONAL AFFAIRS The odd couple behind the same-sex marriage push

VICTORIA Labor leader in hot water over 'dirty' campaign

ENERGY Russian oil card a threat to European integration

CINEMA Understanding grace, mercy and suffering

BOOK REVIEW Pretext for Hitler's dictatorship: the Reichstag fire

BOOK REVIEW The feel-good policies that devastate

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The feel-good policies that devastate

News Weekly, August 16, 2014


How Liberals Make it Harder for Blacks to Succeed

by Jason L. Riley

(New York: Encounter Books)
Hardcover: 184 pages
ISBN: 9781594037252
Price: AUD$47.95


Reviewed by Hal G.P. Colebatch


A new book arguing that government programs and initiatives intended to help blacks in America are actually counter-productive and a major cause of poverty, unemployment, drug-dealing and other crime — Please Stop Helping Us, by Jason Riley — is making waves in the United States.

It comes at a time when the West’s psychologically-related policy of aid-handouts to poor countries is also being questioned and criticised by the recipients themselves.

The book has been hailed by leading conservative black economist and political philosopher Professor Thomas Sowell, who wrote: “This book untangles the controversies, the confusions and the irresponsible rhetoric in which issues involving minimum-wage laws are usually discussed. As someone who has followed minimum-wage controversies for decades, I must say that I have never seen the subject explained more clearly or convincingly” (Washington Times, July 14, 2014).

I have a certain family feeling here. When, many years ago, it was proposed in the Australian Parliament to introduce minimum-wage laws for Northern Territory Aborigines, my father, Sir Hal Colebatch, then in the Senate — and who had left school at 11, getting his start in journalism on the WA goldfields by borrowing a typewriter — asked: “Is the object of the law to benefit the Aborigines or to keep them out of employment.”

I don’t think anyone got the point he was making. The warm and fuzzy feel-good factor surrounding minimum-wage laws is too sticky and pervasive to be easily dispelled. Tragically and inexcusably, the folly of minimum-wage laws never appears to have sunk into our law-makers’ thinking.

Affirmative action also features prominently in Please Stop Helping Us. Another commentator, Professor David L. Goetsch, has pointed out: “For example, Riley shows that black unemployment was significantly lower before minimum-wage laws were first enacted 60 years ago.

Thomas Sowell

“With the passage of minimum-wage laws, unemployment among black Americans — particularly black teenagers — has grown steadily. A 50 per cent unemployment rate among black teenagers is now common in America’s larger cities; a condition that encourages participation in the drug culture and gangs” (Patriot Update, August 1, 2014).

Professor Sowell comments: “Pricing young people out of work deprives them not only of income, but also of work experience, which can be even more valuable. Pricing young people out of legal work, when illegal work is always available, is just asking for trouble. So is having large numbers of idle young males hanging out together on the streets.”

Professor Goetsch comments: “The ‘illegal work’ Sowell refers to is, of course, drug-dealing. As for ‘idle young males hanging out together on the streets’, their next logical step is to join a gang. That choice is almost a certainty.”

Sowell continues: “There is nothing to match Mr Riley’s book as a primer that will quickly bring you up to speed on the complicated subject of race.… Mr Riley knows how to use plain English to get to the point. He also has the integrity to give it to you straight.…

“The result is a book that provides more knowledge and insight in a couple of hundred pages than are usually found in books twice that length…. Unlike academics who just tell the facts, Mr Riley knows which facts are telling.”

Goetsch writes: “As for Affirmative Action, Riley asks the obvious question: has the program actually worked? He then provides hard data to show that Affirmative Action — in spite of its appealing name — has been an abominable failure. One of the worst problems with Affirmative Action is that in many cases it has set capable young black people up for failure.

“One of the ways it does this is by admitting them to prestigious universities that maintain academic standards the black students cannot quite meet (nor can a lot of capable white, Hispanic, and Asian students).… Black students who are admitted to prestigious universities but lack the prerequisite academic credentials are doomed to fail when they could have done well at most any state university, college or community college.

“When students are admitted to a prestigious university because of their race rather than academic merit, a double injustice is done.

“The first injustice is to the student who is bound to fail because he or she is not academically prepared to compete with the best students in the world — precisely the students found in America’s most prestigious universities.

“The second injustice is to the student who is academically prepared but was refused admission because his or her seat was taken by an under-prepared student of the preferred race. Black students, like white, Asian and Hispanic students, are better served when they enrol in a university where they have a good chance of succeeding, provided of course they are willing to work hard.

“It is far better for students of any race to be graduates of state universities than to be drop-outs from Harvard.”

All this is reminiscent, on an international scale, of many of the Western world’s leaders’ bizarre obsession with another counter-productive feel-good policy: foreign aid, described as the governments of rich countries taking money from their own poor to give to the rich in poor countries, all cloaked in high-sounding rhetoric.

With vast quantities of aid Africa has often gone backwards. Too often such aid has been used to prop up revolting dictators or drive local farmers and businessmen out of existence by providing unfair competition (India has used it for a space program).

Britain under the pseudo-conservative David Cameron has “ring-fenced” its foreign aid budget against any reduction, while cutting its defence forces practically to the point of non-viability. Britain has scrapped two of its three Invincible-class light aircraft-carriers which, ironically, might have been very effective in the few roles in which foreign aid might actually be useful, such as disaster relief and protecting civil populations from riot and massacre.

Britain spent £8.7 billion pounds on foreign aid in 2012, and this is due to rise to £11.7 billion pounds, or 0.7 per cent of the UK’s national income next year — this in a country whose own old-age pensioners die in their thousands each winter from hypothermia, being forced to choose between “heating or eating”. The result of this largesse has been no reduction in poverty — any reduction has occurred as a result of ordinary trade.

Liberia has received massive aid — $765 million, or 73 per cent of its gross national income in 2011. Much of this went on education, leaving its education system in such a dire state that in 2013 every one of its 25,000 university entrance candidates failed. It is beyond bizarre that so obviously useless and counter-productive a policy should be carried on year after year.

The counter-productive effects of much aid, particularly government-to-government transfers, have been documented by development economists such as the late Peter (Lord) Bauer, professor of economics at the London School of Economics, to the point that this truth is beyond being disputed by competent professionals.

Philip Booth, editorial and program director of the London-based Institute of Economic Affairs and professor of insurance and risk management at the Sir John Cass Business School, has written that it is hard to find any positive relationship between aid and growth. Indeed, there appeared to be a negative relationship.

After the late 1970s, aid to Africa grew rapidly; yet GDP growth collapsed and was close to zero or negative for over a decade from 1984. GDP growth in Africa did not pick up again until aid fell in the early to mid-1990s. East Asia, South Asia and the Pacific showed a similar trend.

Booth quotes Fredrik Erixon, chief economist of Timbro, a Swedish think-tank, and author of the study, Aid and Development: Will it Work this Time? (London: International Policy Network, 2005), from which he (Booth) cites a number of detailed country studies that find no benefit from aid whatsoever across a range of periods and a large number of countries.

In total, in the 30 years from 1970, Africa received US$400 billion of aid (and more since then), under different regimes, tied to different forms of economic policy and reform; yet there was no evidence of a single country developing because of aid.

The Economist magazine reported earlier this year that for every dollar which “northerners” lent Africa between 1970 and 1996, 80 cents flowed out as capital flight in the same year, typically into Swiss bank accounts or to buy mansions on the Côte d’Azur.

Leading African economist Dr George Ayittey, president of the Free Africa Foundation, has said: “Africa doesn’t need aid … its begging bowl leaks horribly” (The Economist, January 17, 2014).

Aid was attacked in the strongest terms by the Kenyan economist James Shikwati, when interviewed by Der Spiegel nine years ago:

Der Spiegel: Mr Shikwati, the G8 summit at Gleneagles is about to beef up the development aid for Africa...

Shikwati: ... for God’s sake, please just stop.

Der Spiegel: Stop? The industrialised nations of the West want to eliminate hunger and poverty.

Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor.

Der Spiegel: Do you have an explanation for this paradox?

Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need.…” (Der Spiegel, July 4, 2005).

Hal G.P. Colebatch, PhD, is a Perth author and lawyer. 

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