Bono on capitalism and poverty has got it half right

July 21, 2013 § Leave a comment

bono-obamaMaybe it is just me but I’m shocked by Bono’s comments. Recently during a speech at Georgetown University’s Global Social Enterprise Event, Bono, U2’s lead man and huminitarian, said only capitalism can cure poverty.

“Aid is just a stop-gap. Commerce [and] entrepreneurial capitalism takes more people out of poverty than aid. In dealing with poverty here and around the world, welfare and foreign aid are a Band-Aid. Free enterprise is a cure. Entrepreneurship is the most sure way of development.”

Bono is popular for his humanitarian efforts and is a big foreign aid advocate. Unfortunately I fell into the trap of believing the “only socialists care about impoverished people” stigma and somehow he was a socialist of some sorts. Who knows, maybe after circling the globe many times, and witnessesing impoverished countries, he came to this realization.

But Bono got it halfway right. He said aid is like start up money and a band aid. Not quite, Bono. Foreign or any type of aid is more like a hindrance to development, many times the country’s leaders’ pocket money and can result in chronic dependence. Or in Egypt’s case, for a most recent example, foreign aid is simply a tool of control and compliance. Also, Bono, start up money and investments are apart of capitalism but not when such funds come from government, as you have done in the past and I hope you cease to do in the future.

Same with charity efforts. Charity is a band aid; capitalism is the cure. I can’t remember the economist who shared the following sentiment but it was something to this effect: the entrepreneur is more valuable than the humanitarian because the former provides sustenance, a way of life, while the humanitarian gives a hand out, thus leaving the impoverished returning for more the following month. Put another way, it’s more effective to teach a man to fish.

Lastly, let not his statement or position be misconstrued. Poverty, and/or different degrees of welfare and standards of living will always be present. Individual bear different skills, capabilities, connections, etc. and are thus rewarded differently in the market place and society. Even the fallen communist nations had differerent classes of people: namely, the well-off politically connected and the poor regular citizens. The socialists claim capitalism promises the end of poverty but this isn’t true. Unfortunately capitalism rarely exists in the world and is often conflated with mercantilism, protectionism and imperialism, three huge factors of poverty and failed states.

Hopefully other celebrities will come out and preach the goodness of capitalism.

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