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PETER BAUER A TRUE FRIEND OF THE WORLD'S POOR SAUVIK CHAKRAVERTI VIEWPOINT 4 Peter Bauer A True Friend of the World's Poor Sauvik Chakraverti n the west Bauer is being A friend who will be sorely missed. remembered as the man who And a friend who will one day be opposed foreign aid most read and honoured in every trenchantly. He called aid Economics classroom in the Third "government-to-government World and whose bust will be Itransfers" and said that they went prominently displayed in every from the poor of the developed Third World bazaar. world to the rich of the underde- A few days before Lord Bauer’s veloped. Margaret Thatcher was death, a report appeared in the strongly influenced by Bauer—she papers saying that the Delhi gov- was instrumental in getting him ernment was putting out posters elevated to the House of Lords in telling the citizens not to give alms 1982, and reportedly asked Third to beggars. Officials were quoted as World leaders at a Commonwealth saying that beggary had become an meeting to read Peter Bauer—but "industry" and a traffic hazard. even she did not close down And further, that judging by the Britain’s Office of Development sheer number of crippled Assistance (ODA). To the bleeding beggars—mainly children—they hearts brigade, Bauer’s opposition were sure there was a "supply to aid would make him an enemy chain" ensuring that cripples were of the world’s poor. In this tribute available in plenty for the trade. to the greatest development econo- If Lord Bauer were here, he mist that ever lived, I will take the would greet this news with a wry position that, contrary to the views smile. It was he who had first made of the bleeding hearts brigade, the penetrating observation that Bauer was really a true friend of widespread beggary on the streets the poor people of the Third World. of India and Pakistan is not a sign 2 CENTRE FOR CIVIL SOCIETY of poverty; rather, this widespread beggary exists because the pre- dominant communities in both countries, Hindus and Muslims respectively, believe they earn spir- itual merit by giving alms to the poor. This acute observation of his is dated 1965, and is contained in the very first chapter of his book criti- cising Indian planning. In his words: Hinduism and Islam, the two prin- cipal religions [of India], encourage begging, since they enjoin their follow- ers to support beggars. Both religions extol the contemplative life, especially that of the religious mendicant, which encourages the emergence of large numbers of both genuine and bogus Peter Bauer religious mendicants.1 plex as we scratch the surface of He pointed out that, in India, Third World poverty and look at there were no Sikh, Parsi, or Jain phenomena like widespread beg- beggars–because these communi- gary with a more critical eye. ties discourage beggary (a blot on Economics has a lot to do with the entire community), encourage observation. Great economists self-help, and practice collective have not been abstract theo- charity effectively. rists—the so called Ricardian vice Among the Sikhs, for example, is just that: a vice—and Lord Bauer the gurudwara hosts a daily langar was no abstract theorist. He was a where any poor person is free to keen observer. His piercing obser- eat to his heart's content. But with vation on beggary in India and it comes a positive motivational Pakistan has enormous implica- factor: the same poor man is tions if we want to put in place encouraged to go out, struggle, policies that will really help the earn a living, and one day host a poor. If the government of Delhi langar of his own for the poor. has woken up to the fact that beg- There is also a negative motivation- gary is an industry here, it is time al factor: if any Sikh is found beg- the entire planet went into a hud- ging, other Sikhs will come and dle to discuss what constitutes the beat him up! The question: Who is best charity. a true friend of the poor and who is an enemy begins to look more com- BAUER: A TRUE FRIEND OF THE WORLD’S POOR 3 The phenomenon of widespread give alms generously to beggary in India is best understood every beggar on the street by looking at an example from 3. Contribute to the nature. The road between Roorkee Missionaries of Charity or and Dehradun passes through a other such organisations thick forest. I often drive down this actually working to help road and never fail to notice that, at the poor. various points along the way, thou- sands of monkeys hang around waiting for the scraps of food that t is every person's duty to Hanuman worshippers2 throw at himself, his family and them. Does this prove that the for- Ihis society to help himself est is poor and resourceless? Or and not be a burden on does this illustrate the role of others. This is the only ethic incentives—what psychologists in a free society. Then, the call "positive reinforcement." The only economic policy that monkeys have discovered that should apply is complete hanging around by the road is a economic freedom—with cool way of getting food. Similarly which comes responsibility with beggars. Because civil society gives alms generously, many have found out that beggary is an easy I am happy to report that, after a mode of existence. These beggars brief introduction to basic Econ- do not prove that India is poor. omics, schoolchildren overwhelm- Rather, these beggars prove that ingly go for the third option. There Indian civil society is rich and gen- is no other way to meaningfully erous: indeed, overly generous. help poor people. It is a hard fact Lord Bauer's observations on beg- that life is a struggle against gary mean that global civil society adverse circumstances for all, and must reconsider charity. And then it is every person's duty to himself, the million-dollar question will be his family and his society to help raised: Do we need the state to himself and not be a burden on meaningfully help the poor? I often others. This is the only ethic in a go into schools and lecture on basic free society. Then, the only eco- Economics. The students appreci- nomic policy that should apply is ate free markets, but always ask: complete economic freedom with What about the poor? I then pose which comes responsibility. the question: Of the following It is Bauer who first championed ways to help the poor, which economic freedom for the world's would you choose and why: poor–at a time when the entire 1. Pay taxes to the state and Third World went in for massive ask it to help the poor state-directed development at the 2. Take direct action and advice of the World Bank and the 4 CENTRE FOR CIVIL SOCIETY IMF. These architects of failed pol- possess the freedom to sell this icy manufactured permanent pov- extremely wonderful alcoholic erty in the Third World by aiding drink. There are countless Indians corrupt, predatory states which who can play musical instruments, economically repressed entire peo- sing and dance, but because the ples. It was Bauer, alone, who dis- State has outlawed the nightlife sented. As the Third World gives industry, they languish in poverty. up statism and moves to free mar- Bauer truly appreciated the eco- kets—and India is definitely pro- nomic skills of poor people in gressing in this direction—it is Africa and Asia. He noted, for Bauer who emerges as the tower- example, how, because of low pur- ing hero. An Economic Times edito- chasing power, retailers would rial obituary on Lord Bauer was break down bulk to extremely titled: He told us so…Bauer emerges small portions: in Africa, you could as a friend of the world's poor for buy matchsticks in pairs; and in another, and equally important India, cigarette vendors regularly reason: he appreciated their facul- sell loose cigarettes. His studies on ties. In the fashionable circles of the rubber industry in Malaya sang development economics, most illu- praises to the ingenuity of small striously represented by the writ- traders who actually managed to ings of Leftists like Gunnar Myrdal collectively farm more rubber than and Amartya Sen—both Nobel the colonials. Thus, Bauer is always Prize winners—the poor of the to be found blasting what he Third World are looked upon as famously called "the denial of the stupid, illiterate ne'er-do-wells, economic principle:" the fact that while their ruling elite are consid- development economics consid- ered an "intellectual-moral elite."3 ered Third World poor to be sub- Neither speak of economic free- dom: India is ranked 122 in the World Economic Freedom Index 2001, and Amartya Sen makes no noises about it. He stresses the role of the state in educating the poor. Like Gunnar Myrdal, he considers the poor to be stupid, and the per- sonnel of the State to be in posses- sion of knowledge which will help the poor. Any student of Bauer would point out that poor tribals living in the jungles of Central India possess the knowledge to dis- til mahua from a jungle flower of the same name, but they do not BAUER: A TRUE FRIEND OF THE WORLD’S POOR 5 human—i.e., something less than mon man." Homo Economicus. To students of In India, it is now a horrific truth Lord Bauer, this 'denial of the eco- that the State is a predator on the nomic principle' is nothing less informal sector.

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