How To Save Africa
Africa is poor. Very poor.
Saving Africa has rightly become a popular concern, uniting Bono and Bill Gates, Angelina Jolie and Pope Benedict XVI. Despairing of academic skepticism, the intellectual force of this movement, Jeffrey Sachs, appeals directly to the people promising $110 per head to end destitution and disease in Africa. Who could resist such a humanitarian bargain?
However, in economics the best of intentions does not necessarily lead to the best of outcomes.
The long history of living standards suggests that the 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.
Industrializing Africa is the only way to solve its poverty. The industrialization of coastal China — accompanied by declining public health provision, a neglect of agriculture, and environmental degradation — ultimately transformed the lives of the Chinese.
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. In the Malthusian era, what is now vice in economic policy — violence, poor public health, war, inequality — was virtue in terms of living standards. And what is now virtue, vice.
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. Indeed, material consumption has fallen well below the preindustrial norm as a result of the Western gift of modern medicine and hygiene. A host of countries, such as Malawi or Tanzania, would be better off materially had they never had contact with the industrialized world and instead continued in their preindustrial state.
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.
If Mr. Sachs' Millennium Project succeeds where most of its effort is concentrated, in reducing mortality, then it will further erode living standards. In Uganda, for example, at incomes that are the equivalent of $3 a person a day, the population is still growing at 3.5% per year. Given the heavy dependence of Uganda on agriculture and natural resources, population pressure has ensured that even with improved crop yields, incomes have stagnated over the past 40 years.
Fourteen percent of children born in Uganda die before the age of five. If the Millennium Project reduces such deaths to American levels, that alone will increase the population growth to 4.2% a year. Without sustained economic growth, this is just a recipe for more miserable living conditions.
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.
Fostering industrialization is not easy. British Colonial administrators in India between 1857 and 1947 engaged in many of the cheap but effective health and agricultural improvement and infrastructure measures that Mr. Sachs advocates. India remained impoverished, however, because no enlightened government edict could make Indian textile mills profitable. Indeed India deindustrialized in that era.
There is no simple formula for industrialization that is appealing to many. But that is where the focus must be of the attempts to help Africa. The Sachs plan is a proposal to ameliorate the symptoms of poverty, not treat its cause.
Mr. Clark is a professor of economics at University of California, Davis, and author of the upcoming "Farewell to Alms: A Brief Economic History of the World" (Princeton University Press, September 2007).
