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Reconsidering foreign aid

We need to stop giving people in foreign countries free stuff. This sounds mean. I want people to do what they can to help their fellow person and that’s why I think we should stop with the charity. The current foreign aid system is doing more harm than good, keeping the people of the third world poor and in poorer living conditions. There are ways we can really help these countries.

When I say foreign aid, I’m not just talking about the federal foreign aid that makes up a tiny portion of the budget. I’m referring to the whole system of governments and nonprofit foundations that send billions of dollars overseas every year. Solving the poverty issue with this model will never work, because it ignores the conditions of countries that build wealth. So, what harm has it done?

Let’s take the classic example of TOMS shoes. Although they have evolved their ways of charitable work, their “buy one, give one” charity should be examined. It seems easy and nice enough to buy a pair of TOMS and feel good that someone somewhere is getting a nice free set of shoes. People don’t tend to think beyond the gesture and realize the economic consequences this has. If poor nations across the world are getting free shoes from TOMS, what does that mean for shoemakers in those poor countries? It destroys them.

It’s hard to compete with free. No matter how cheap the person can make shoes, people are not going to buy shoes from them when they can just get them for free. To me, it would make more sense for a large company like TOMS to invest some of its resources in these countries. If you take someone that wants to make shoes in a poor country and work with them to build the capital they need to make and sell shoes, you will do a lot more good. This provides manufacturing and sales jobs which will create more wealth and give poor people in these countries more agency in their lives. They can make money and spend it in a more robust economy. Free stuff destroys economic potential.

If helping the poorest nations is as easy as giving them free stuff and money, why don’t we just do it? There are several estimates that ending poverty and hunger would not cost that much money. Going on the assumption that these numbers are correct, just giving the people that money won’t work. In order for a country to become economically successful, it needs a few things. It needs a strong infrastructure, the rule of law, uncorrupt governments and a stable mixed-market economy. We should work to promote these aspects of society in order to help them.

Technological advances in the industrialized world are going to create an amount of social and economic inequality unlike anything we have ever seen. Making sure these countries can build stronger economies will help them achieve the same levels of progress of other countries.

We need to help people live the best lives they can. Eliminating global poverty is one of many things humanity will need to accomplish soon. When we are trying to help these people out, we need to make sure we are addressing the right issues. If rich philanthropists want to help, they should not give away free stuff. They should work with these people and invest in their economies to build a better tomorrow. If we do not reconsider our current methods, the world will continue to have perpetually poor people that are dependent on aid.

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