Texas is a largely-Christian state that appears to believe in neither forgiveness nor redemption. Last week the Guardian revealed the extent to which it has criminalised its children(1). Police now patrol the schools, arresting and charging pupils as young as six for breaches of discipline.

Among the villainies for which they have been apprehended are throwing paper aeroplanes, using perfume in class, cheeking the teacher, wearing the wrong clothes and arriving late for school. A 12 year-old boy with attention deficit disorder was imprisoned for turning over a desk; six years later, he’s still inside. Children convicted of these enormities – 300,000 such tickets were issued by Texas police in 2010 – acquire a criminal record. This makes them ineligible for federal aid at university and for much subsequent employment.

Yet most of them have committed no recognised crime. As one of the judges who hears their cases explained to the Guardian, “if any adult did it it’s not going to be a violation.”(2)

Above and beyond how abhorrent this is, it also points neatly to a paradox at the heart of US conservatism over (at least) the last decade. Loudly and violently (if only ostensibly) in favour of promoting freedom in the rest of the world; brutally and effectively in favour of curtailing freedom in the United States.

This frustrates me – by inclination I suspect that not all of what he does is great, and not all of what he does is bad. And it would be very helpful to separate the good from the bad, and the successful from the unsuccessful. And then, who knows, maybe we might learn a bit. It wouldn’t be as exciting as re-staging the cold war, but it would be useful from a development perspective.

And so: if you know of any impartial and intelligent writing on Chavez which attempts to do this please do let me know.

Also, if you’re a Chavez fan, have a crack at explaining the following:

Venezuela’s homicide rates are among the highest in the hemisphere — twice those of Colombia and three times those of Mexico — despite largely escaping the world’s attention. Rates were rising even before Hugo Chávez assumed power. But under his 12 years they have skyrocketed, from 4,550 in 1998 to 17,600 last year. The victims are predominantly poor young men — killed for as little as a mobile phone, caught in gunfire between gangs, or even subject to extrajudicial killings by security forces. (from here)

How can this be commensurate with the rise of socialist utopia? And how can criminal violence be rising amidst social progress and falling inequality?

If there is a good explanation I am genuinely interested in hearing it.

The wrapper of a sweet given to us in a course recently.

Rich in Glucose!

Corporations and the larger, increasingly global corporate state is evil. Full stop.

I’ve always been uncomfortable applying the word evil to very broad categories, such as ‘corporations’. But his comment reminded me of one other important point about global businesses and global trade: the issue is not purely economic, political economy is deeply important too.

There are no such things as free markets or free trade. Markets and trade always occur embedded in institutions – laws and norms that form the rules of the game. And these rules can make things considerably better or worse for workers above and beyond the pure economics of what is occurring. If you get good, fair rules workers will typically benefit most from trade. The trouble is that in countries such as China the rules aren’t good or fair. What’s more, the fact that they’re not good or fair reflects in part the impact of lobbying from business groups. Here’s Johann Hari writing in 2007.

Last year, the Chinese dictatorship announced a new draft of labour laws designed finally to allow Chinese workers like her – too late – some basic rights.

The new law would permit people like Lan and Meiren to join trade unions. It would give them the right to a written contract. It would give them the right to a severance payment. It would give them the right to change jobs freely. Where previously China’s labour rules were diffuse, dispersed and barely enforced, now they would be drawn together and backed with big fines.

The dissident-killing Chinese Communist Party didn’t propose this change out of a sudden flush of benevolence. They did it because the Chinese people have in increasing numbers been refusing to be tethered serfs for the benefit of Western corporations. Last year, there were 300,000 illegal industrial actions in China, a huge spate of “factory kidnappings” of managers, and more than 85,000 protests.

The Chinese people were showing they did not want to leap from a Maoist gulag to a market-fundamentalists’ sweatshop. They demanded a sensible compromise: strong trade and markets to generate wealth, matched by strong trade unions to stop markets devouring them. They want an end to grinding poverty, but one that doesn’t kill them as they get there.

But they bumped into a huge obstacle. Groups representing Western corporations with factories in China sent armies of lobbyists to Beijing to cajole and threaten the dictatorship into abandoning these new workers’ protections.

The American Chamber of Commerce – representing Microsoft, Nike, Ford, Dell and others – listed 42 pages of objections. The laws were “unaffordable” and “dangerous”, they declared. The European Chamber of Commerce backed them up.

Like I said, I have some trouble with the word ‘evil’, but lobbying China to be more repressive? That’s evil if ever I saw it.

Mike Daisey was a self-described “worshipper in the cult of Mac.” Then he saw some photos from a new iPhone, taken by workers at the factory where it was made. Mike wondered: Who makes all my crap? He traveled to China to find out.

That is the tagline from this week’s This American Life, freely available as an mp3 this week. Often funny but also often horrifying: Child workers, terrible workplace injuries, and police state tactics. They have released reports on the Apple subcontractor from October 2010, May 2011, and September 2011.

I am of two minds. If even a tenth of the abuses are systematically true, then even the most ardent capitalist among you should be incensed.

On the other hand, I am in the midst of a randomized control trial of factory labor in Ethiopia. One reason is because I believe–and the early results suggest–that the improvements in poverty and work conditions and risk and well-being are huge. Huge huge.

When this choice is presented as a simple binary it is a very unappealing one. Buy iPods and support a system that is exploitative and abusive. Don’t buy iPods and leave people condemned to rural poverty. It’s an agonising choice. For what it’s worth I think the least worst option here is to buy the iPod. But the least worst option in this binary is not the same as the actual best available option in reality. There is a third way. It’s simple.

Continued global trade but with workers’ rights. Workers in factories in China and Ethopia would still receive low wages but they probably wouldn’t be quite as low as is currently the case, and their working conditions definitely wouldn’t be so bad.

And how could this happen? In a world of developing countries that were democratic and well governed, it would be easy: trades unions to offset the bargaining advantage of bosses; and the progressive implementation of some workplace safety laws brought about via the democratic process.

Trouble is, neither China and Ethiopia are democratic or well governed (although I guess the situation is slightly better in Ethiopia???).

Then what? This is where I think there is a very real role for consumer activism in developed countries. As much as possible, avoid products produced in situations where workers’ rights are violated. As much as possible, buy fair trade products. Write to companies to let them know that you’re doing this and why you’re doing this. Don’t tell them “don’t make stuff in China?”; tell them “make stuff in China but protect your workers?” Share this information. Fund entities devoted to obtaining this information.

This is an imperfect, partial solution. But it’s better than either of the horns of the dilemma presented above.

–

As a footnote. The other potential improvement here is to write labour standards into trade agreements (and actually follow up on this). Most economists hate this (“oh noes don’t limit teh free trade!”). Me I’m kind of in favour: I think in theory it would work. Although in practice, in the messy world of enforcement, political economy, unequal power, and trade agreement negotiations, it may well not.

I’m some way in and one thing that strikes me profoundly is that three very commonly held views about the poor are simply untenable based on the evidence:

1. The first of these is that the poor always make the right choices (or, at least that they’ll do so if they are free to do so). This view underpins the proposed solutions to under-development both of free-market economists and radical leftists, as well as (some of the) arguments used by those promoting participatory development. And yet it’s clearly wrong: poor people in developing countries make mistakes. Of course it doesn’t automatically follow from this that someone else ought to, therefore, be making decisions for them. People abuse this sort of power and experts make mistakes too. But it does suggest that simply giving the poor their say, either through market mechanisms, participatory planning meetings, or anarcho-socialism, isn’t going to solve the problems of under development.

2. On the other hand, the view – held mainly by armchair conservatives – that poor people are poor because of their mistakes, is also utterly wrong. We all make mistakes and if mistakes caused poverty we’d all be poor. What’s more there’s no evidence that the poor make more mistakes.

3. The idea, depressingly common in parts of academia, that people in developing countries are profoundly, culturally different from the rest of us – so different as to justify cultural relativism or anti-development thought – is also utterly wrong. Actually, it turns out that poor people have similar wants and preferences to everyone else. They are just less able to meet them.

I wouldn’t say that Poor Economics is a perfect book but, by reflecting the complicated realities or the lives of poor people, and for showing them to be remarkably similar to the rest of us, it is certainly a very good book.

1. Unlike William Easterly’s crowd-sourced effort it’s actually funny (very funny).

2. The failings that propel the satire all feel very familiar. Not because I’m a development old-hand but simply because I’m a person. Double standards, the propensity to conform to group norms even when they’re daft, mixed motives, desire for status. These are all very human failings. And that leads, I think, to the most useful take-away point from this blog: development is a human endeavour. One that is prone, every step of the way, to human failings. This might be stating the obvious but I think it’s something that often gets lost in discussions of development, and it’s worth remembering. Worth remembering because:

* After all, it’s (often) you and me – everyone likes to point the finger at others as being the source of problems in the world of development. And often enough these others are, but it’s worth remembering that we ourselves almost never live up to the standards we expect of others, and so a little bit of humility is a great starting point.

* Development workers make their mistakes, but they do not make them under circumstances of their making (quote mangled from here). The aid world often seems crazy when viewed in isolation. But when you view it as a link in one of the following two chains of craziness it starts to make quite a lot more sense:

(usually) uninformed voters -> vote dependent politicians -> aid agency staffers working at the behest of these politicians -> developing country politicians whose own agendas are the product of a complicated domestic political economy -> aid recipients

or

(often) uniformed donation givers -> NGO marketing departments -> NGO staff -> recipient communities (who often have their own complex power dynamics) -> recipients

* Humans are too complicated for utopia (be that socialist or free market capitalist utopia), trade-offs exist, and the perfect really can be the enemy of the good (and when it’s not it’s often working with the good to pick on the better-than-nothing).

None of this is to excuse the most egregious nastiness of development – this needs to be fought. But the garden gnome variety of development badness on the other hand, that’s always going to be with us, for the simple reason that it comes from us.

That’s a reasonable defence of markets I think. Not markets in everything (there are many areas where otherwise organised collective action is better and or necessary) but markets in some things, at least.

A much less convincing defence of free markets is that they lead to faster economic growth. This is plausible but not really true. Growth, in the long run, is driven mostly by technological change. And successful technological change, it turns out, is often much more about states than markets.

Here’s Naomi Oreskes and Eric Conway in Merchants of Doubt:

“[W]e turn to Milton Friedman’s Capitalism and Freedom, where he claimed that “the great advances of civilization, in industry or agriculture, have never come from centralized government.” To historians of technology, this would be laughable had it not been written (five years after Sputnik) by one of the most influential economists of the second half of the twentieth century. The most important technology of the industrial age was the ability to produce parts that were perfectly identical and interchangeable. Blacksmiths and carpenters couldn’t do it; in fact, humans can’t do it routinely in any profession. Only machines can. It was the U.S. Army’s Ordinance Department that developed this ability to have machines make parts for other machines, spending nearly fifty years on this effort – an inconceivable period of research for a private corporation in the nineteenth century. Army Ordnance wanted guns that could be repaired easily on or near a battlefield by switching out the parts. Once the basic technology to do this – machine tools, as we know them today – was invented, it spread rapidly through the American economy…Markets spread the technology of Machine tools throughout the world, but markets did not create it. Centralized government, in the form of the U.S. Army, was the inventor of the modern machine age.

Machine tools are not the exception that proves the rule; there are many other cases of government-financed technology that were commercialized and redounded to the benefit of society. Even while Friedman was writing his soon-to-be-famous book, digital computers were beginning to find uses beyond the U.S government’s weapons systems, for which they were originally developed. Private enterprise transformed that technology into something that could be used and afforded by the masses, but the U.S. government also played a made it possible in the first place. The U.S. government also played a major role in the development of Silicon Valley. In recent years, something we now all depend on – the Internet, originally ARPANET – was developed as a complex collaboration of universities, government agencies, and industry, funded largely by the Department of Defense’s Advanced Research Projects Agency. It was expanded and developed into the Internet by the government support provided by the High Performance Computing and Communication Act of 1991, promoted by then-senator Al Gore.

In other cases, new technologies were invented by individual or corporate entrepreneurs, but it was government action or support that transformed them into commercially viable technologies, airplanes and transistors come to mind…Still other technologies were invented by individuals but were spread through government policy. Electricity was extended beyond the major cities by a federal loan-guarantee program during the Great Depression. The U.S interstate highway system, which arguably created postwar America as we know it, was the brainchild of President Dwight Eisenhower, who recognized the role it could play both in the U.S. economy and in national defense; it became the model for similar highway systems around the globe…The relationship between technology, innovation, and economic and political systems is varied and complex. It cannot be reduced to a simple article of faith about the virtues of a free market.”

The more a solution to the problems of under-development appears simple and elegant on paper, and the more it appeals to the intuitions of orthodox economists, the more likely it is to fail.

Like all rules of thumb it’s sometimes wrong (CCTs for example) but, on the other hand, the 1980s and 1990s and the broad failure of the decades’ free-market reforms, suggests that generally it fits fairly well with the data.

It’s basically this rule of thumb that made me deeply sceptical of Cash on Delivery Aid, at least in the form that it’s been promoted (incentivise countries in the same way that you can incetivise people? – please). It’s also why I haven’t paid much attention to Paul Romer’s idea of charter cities.

But now it looks like a charter city may actually happen, and Duncan Green’s offered a wager that it won’t work.

I’m with Duncan on this. I think failure is very likely. For the following reasons:

1. Because formal rules, which is the only thing the philosopher kings technocrats in charge of the city would actually control, aren’t the only rules (or perhaps even the most important rules) responsible for making cities work. Informal institutions are critical. And I’m not confident that healthy norms and informal rules will simply arrive in an instamatic migrant city, the way the Charter Cities’ boosters seem to think they will. And if they don’t I suspect the task of governing the city will become difficult, and difficultly bureaucratic pretty quick.

2. Issues of political economy. I would imagine that in the lead up to the creation of the city, there will be a major push by interested businesses to get sweet deals for themselves, with regards to the city, from the Honduran government. And I imagine that the government, being eager for the project to be seen to work, will grant such deals. Which will make the city a less than optimal place for its workers.

3. Of course, if the city is a worker’s hell-hole workers simply won’t move there. So even if they don’t have any political voice in the rules of the city, they still have exit (or never entering in the first place) as a tool to ensure their rights. However, information about the city won’t be perfect and exit is never as easy in practice as it is on paper, particularly for poor migrants. All of which makes me think that worker welfare will be under catered to in the city.

4. No city is an island. Presumably there will be relatively easy migration in and out of the city (otherwise the problems in point 3 would be much worse), which I suspect will lead to rather messy spillover effects. On both sides of the city line. Squatter camps on the outside and crime on the inside, for example.

I could be wrong. And as is usually the case when I’m pessimistic about someone else’s development solutions I hope I’m wrong. But I really doubt charter cities will work.