Fighting Poverty with Capitalism

PBS NewsHour (of all places) featured this hopeful item on Martin Fisher, a designer who went to Africa a socialist wanting to help poor African's escape poverty and, after six years of disappointment, became, as he put it, "a small-'c' capitalist" selling water pumps to farmers.


The money quote comes from Mark Bell who teaches international agricultural development at the University of California at Davis. Contrasting two ways of attempting to fight poverty in rural Africa he says:

If you go in and say, here's a freebie, then people are going to say, sure. Give it to me. And when you leave, you know, who knows what happens to it. But if a farmer is given the opportunity to assess and then makes the decision to buy, I think that's the real proof that this is something that is beneficial to him.

This is the main lesson yet to be learned by many foreign aid activists. The last sentence gets at the heart of demonstrated preference. When a person trades away property to receive something else, he demonstrates that the maker of the good (in this case water pumps that are practically useful and inexpensive enough to afford) has actually done something productive.