Thursday, August 30, 2007

Does Malthusian logic apply to Africa today?

The long history of living standards suggests that the [Jeff] Sachs plan is more likely to further impoverish Africa than enrich it. The promised health improvements and one-time gains in crop yields cannot create sustained improvement of living conditions. ...

Before the Industrial Revolution all societies were caught in the same Malthusian Trap that imprisons Africa today. Living standards stagnated because any improvement caused births to exceed deaths. The resulting population growth, pressing on fixed land resources, inevitably pushed incomes back down to subsistence.

But living conditions did vary across pre-industrial societies. Perversely, rich societies were those where nature or man created high death rates. In such settings living conditions could be good as long as the population did not grow. ...

The African environment has always created high disease mortality. This was a blessing for Africa's living standards. Before the Industrial Revolution, Africa was rich, with material consumption probably double or triple that of China, Japan, or India, and as good as that of Europe. For example, when the British were looking for cheap labor in East Africa in the 1840s they had to turn to India for low-wage workers. Asian living standards were low because of high standards of personal and public hygiene in preindustrial China and Japan. This condemned Asia to subsistence on a minimal diet. Europeans in contrast were lucky to be a filthy people who bathed rarely and squatted happily above their own feces, stored in basement cesspits. Filth engendered wealth.

Most of the world, thankfully, has escaped the topsy-turvy logic of the Malthusian era through the Industrial Revolution. Living standards are now independent of population levels, so any reduction in mortality is an unalloyed blessing. This is how Mr. Sachs thinks of the world.

But much of Africa is still trapped in its Malthusian past. ... Modern medicine, airplanes, gasoline, computers — the whole technological cornucopia of the past two hundred years — have succeeded there in producing the lowest material living standards ever experienced. Modern medicine has reduced the material minimum required for subsistence to a level far below that of the Stone Age. ...

To achieve sustained growth economies, Uganda would have to switch employment to manufactures and services. Despite the astonishing low wage of these economies — apparel workers in East Africa still cost about $0.40 an hour compared to $10-$20 in America and Europe — industrialization has escaped Africa.
--Gregory Clark on another theory of why Africa is poor and how to get it out of poverty

1 comment:

Jess Austin said...

I guess I'll have to read Clark's book, but other economists haven't been too kind. I wish there were a well-articulated viewpoint somewhere between Clark's and that of, e.g., Dani Rodrik. It seems to my relatively uninformed ears that the experts are talking past each other. (Actually, upon testing the link I realized that Hausmann may be such a moderate voice.)

If I may hazard a broader critique, it is that any "big argument" made by any economist (Sachs, Friedman, whomever) seems to come with "big assumptions" that threaten to completely undermine it. Sachs's suggestion of increased aid to Africa invites comparison to previous aid programs, and the picture I have of those is not pretty. This seems to a challenge for Sachs whether or not he accepts the trade-off that Clark finds between public health and private prosperity.