onsdag 16 maj 2007

Jeffrey Sachs Reith Lecture - Remedy for Poverty

Jeffrey Sachs cites the Nordic countries as a model for the remedying of chronic poverty in Africa. This displays an astonishing ignorance. Political systems are a product of a history and culture. They cannot be transferred. In any case, the Scandinavian model of high welfare and high taxation of labour is not sustainable. It pushes up the cost of labour and drives the most talented and entrepreneurial people away. Ingvar Kamprad, head of Ikea, lives in Switzerland. Ingemar Bergman before him lived for many years as a tax exile from his home country. If the Swedes et al wish to keep their welfare system in the long term, they will have to shift to the taxation of land values instead of the taxation of work. The whole thing depends on a massive and generally honest bureaucracy to run it. This is not a model that anyone should be recommending for export.

People have looked to Scandinavia before as an example of the way to do things - this was in the late 1950s, when Swedish architecture and planning was much admired and planners tried to build the same kind of thing in Britain. It didn't work. Swedes are self-disciplined and conformist, the country is big and sparsely populated outside the cities, which are quite small, and many families have a summerhouse in the countryside. In contrast, the English were used to living in houses and doing their own thing, with at least a few square yards of private open space. Eventually, the model 1950s developments around Stockholm and Göteborg became problematic too.

Curiously, Sachs said nothing about land ownership and land tenure in Africa. No country can get itself out of poverty if that is not sorted out so as to give everyone access to land and natural resources.

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