Working Robots Controlled by Overseas Workers

https://www.youtube.com/watch?v=-KxjVlaLBmk&feature=youtube_gdata_player

If you were to start a cafe in a developed country, you may want to employ someone to help run the place. The problem is you must typically pay high prices in developed countries for labour.

However, what if you used a robot in your store, and this robot is controlled via the internet by a low-cost worker in a developing country? The potential profits would be enormous, and this opens the door to enormous job creation in the developing world, potentially lifting millions from poverty.

The video above shows that machines are already highly advanced. I am confident that such technology is possible.

As someone who works in the city, I know that there is a demand for cheap food. You can get a fresh baguette in Melbourne for about $6. Most of that cost would likely be in the form of labour. However, if robots were used to make this baguettes, the cost of lunch could fall to $2.

Macrolending - An Alternative to Microlending

Above is a trailer for a documentary titled The Micro Debt, which seems to criticize microlending as a tool for alleviating poverty.

I've had a Kiva account for a while. Kiva allows any of us to lend money to entrepreneurs in developing countries. But I've always been unsure about how effective this is because when the money is lent to the entrepreneur in developing countries, it is at extremely high interest rates (around 30 to 40 per cent). Most businesses in developed countries struggle to even produce 10 per cent, so to expect people in the developing world to earn 30 or 40 per cent is highly optimistic.

The answer to poverty, in my opinion, can be found in Asia, especially in China. Institutions need to be in place to create labor-intensive low-skilled jobs. The products are then normally exported to developed countries.

Kiva must change. Instead of lending money to microfinance institutes at zero per cent interest who then relend that money to poor entrepreneur for 40 per cent interest, Kiva should take lenders' money and instead lend it at zero interest rate to large labor-intensive companies like Nike, Adidas, Foxxcon, or HTC on the condition that in return for receiving zero interest loans, these companies must hire people from poor countries. Kiva can then pay auditors like Ernst and Young or PricewaterhouseCoopers to audit these firms to provide to Kiva and microlenders assurance that a certain number of workers are being hired and paid a certain amount and that basic labor rights are maintained, e.g. the right for workers to go to the toilet.

If the venture does not work, the lenders lose money. If the venture works and profits are made, it can be split in half between Kiva and e.g. Nike (or any other proportion the two organizations negotiated). Either way, for labor-intensive companies there is a no-risk venture as all the risk is absorbed by the lenders and all the gains are for the company.

Aid Workers Jailed for Fraud on USAID and World Vision

Two aid workers were jailed for 12 years for defrauding USAID, an American aid agency. USAID contract World Vision to use $1.9 million to help poor Liberians. Under the initiative, the two aid workers were required to monitor World Vision workers as they distributed aid. But the two aid workers instead sold the food and pocketed the profits. The fraud was revealed by an internal audit by World Vision.



That the fraud was caught by World Vision's internal audit should give World Vision donors most confidence that the money they provide to the non-profit organisation is being used legitimately. If a humanitarian agency has no bad news, it is likely that the organisation has no internal or external audit function. World Vision has not only an internal audit function but is also externally audited by PwC.

Source: Aid workers get 12 years for US aid fraud in Liberia

Charity Junk Mail

I once gave a donations to Care International and Amnesty International over the internet, which involved giving credit card details as well as my address. These organisations then harrassed me, wanting to get more money from me. Care did so by sending me mail and Amnesty International actual got their telemarketers to ring me. I find it very rude that they do this. It would be much better if they just let people give when they feel like it. I am always very careful to read the privacy policy now and I have made decisions not to give money because of their policy. Why can't these charities just let people give money anonymously or if they collect your details (e.g. if they want to give you a tax receipt) then at least have a policy whereby you can actually opt out of junk mail?

Exploiting Cheap Labor

"As for the rich in the present age.... They are to do good, to be rich in good works, to be generous and ready to share." ~ 1 Timothy 6:17, 18

I am still a twenty-something, but I am almost thirty, and many of my friends are younger than I am, which makes me feel old. When a man feels old, he goes through a mid-life crisis and starts to ask himself questions such as what will his legacy be once he dies. If you're going to die, you might as well do something worthwhile while you're on this earth. But what is worthwhile?

This is a question for each individual to find out for himself, but if a man wants to have a positive impact on the world, a good place for him to start is to help others, especially the poor. If you are reading this now, chances are you can afford internet connection, and chances are you are among the wealthiest people in the world.

Of all the people in the world who care about the poor, I approximate that most of them believe that although helping the poor is a virtuous goal, it is a futile effort. Most people I speak to say that they would like to live in a world without poverty, a world in which the rich shared money with the poor, but they believe that they don't have enough money and that there is too much greed among humans, which leads to theft, and theft in turn creates poverty.

But I respectfully disagree. I believe that in the last century we have witnessed in India and China the greatest escape from poverty in human history. China and India are the most populous countries and the world. Together these two countries make up 40 per cent of the world's population. Yet the rise in the living standards in these two countries is not primarily the result of sharing wealth. In my humble opinion, the explosion of wealth in these two countries over the last few decades is primarily the result of mass exploitation of cheap labor.

Charity is an unreliable source of income. If you beg someone for money, he may hand you a dollar today, but rarely is a person willing to give too much, and the desire for charity is as fickle and unpredictable as the desire for sex. If you made a living from begging for money in the streets, chances are you will not have enough and you will not be satisified. How then do you and I make money?

We make money by working.

A job gives a worker not only money but it also allows the worker to develop skills and to help customers receive some good or service that they need. A job therefore is not like charity in that it does not rely on the fickleness of altruism but rather it exists to fulfill consumer needs.

"If a man will not work, he shall not eat." ~ 2 Thessalonians 3:10

Millions of Indians and Chinese grew rich because jobs were created. It is true that many of those who benefited from the sales of goods made through the exploitation of cheap labor were already rich (e.g. the shareholders of Nike) but if it weren't for Nike existing in the first place, these jobs would not have existed. If jobs eradicate poverty then those who create jobs should be rewarded greatly. Nike executives have found a way to give millions of jobs to poor citizens in poor countries and create demand for this labor through ingenous marketing to induce consumer demand.

So what are we to do? What is all this writing about? By writing all this I am trying to tell everyone that we do indeed have a lot of power in our hands. As consumers, whenever we buy a t-shirt that is made in China we are supporting jobs in China that allows someone in China to live by earning something rather than nothing.

The main point of this essay I write is to encourage readers to exploit cheap labor. If we see cheap products made in poor countries, we should not feel guilty buying it. Furthermore, products that exploit cheap labor tend to be cheaper, which benefits the consumers who buy them. Hence exploiting cheap labor is a win-win situation. When we go on holiday or when we retire, we should travel to poor countries and try to buy products that exploit cheap labor. How do we know what goods and services exploit cheap labor? That is where your common sense comes in. If you go to a poor country and stay at an expensive Western-style hotel that pay high wages to rich workers, chances are you are not helping the poor as much as if you go to a cheap three-star hotel that hires and pays low wages to poor workers.

Beyond Social Business and Microcredit

The Problem with Microcredit

Wikipedia defines microcredit as follows: "Microcredit is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the provision of a wider range of financial services to the very poor."

The problem with microcredit is that it is doubtful that it works. What microcredit does is allow poor people to get loans. Making poor people rich with microcredit is like trying to make a young university student rich by giving him a credit card. In theory the young university student, with his credit card, could buy computers and other equipment and then start up an IT business in a garage and then suddenly become a millionaire. This could happen. But it's unlikely. (Read From Uni Dropouts to Software Magnates.) Likewise, a poor entrepreneur could borrow money, start up a business, and become very successful, but it's unlikely.

How do young university students escape from poverty? They get jobs. Once a university student gets a job, he can pay off his credit card bills and start saving up for a house, car, marriage, children, or whatever.

Similarly, for a poor person to escape from poverty, he needs a job! We know this works because it has worked in China. The greatest escape from poverty in human history has already occured China, and it occured through massive employment of poor people in low-skilled manufacturing jobs. This is the answer to world poverty.

Social Business

Muhammad Yunus, who won the Nobel Prize for inspiring a global microfinance movement, seems to be growing skeptical about microcredit. According to Banker to the Poor Goes Beyond Microlending, Muhammad wants to encourage "social business" instead. Social businesses are businesses are designed for social purposes and not profit. They make money only to pay for operating costs.

I believe there are many problems with this idea. The main one being that if there is no profit then the incentives for starting a social business are non-existent. This means that there will not be many social businesses and hence there will be little employment. Because there is no profit to be made, a social business will not be as competitive compared to a for-profit business.

The Solution

Here is my solution. Currently we have the situation illustrated in the diagram below. A worker and a company come together. The worker gives labor to the company and the company gives a salary to the worker. Unemployment is created when the value of labor is less than the salary so that the company has no incentive to hire the worker.

My solution involves a philanthrophic investor stepping in and paying the worker's salary. This may sound like a major sacrifice if we look at wages in developed countries, but many of the world's population can live on about $1 per day, so it is not a big deal for a wealthy philanthropist to pay the salary of a worker. In fact, the philanthropist can set aside about $7300 worth of government bonds whose income will pay the worker's salary, assuming the government bond yields 5 per cent per annum.

The philanthropist will pay the worker's salary and in return the company will give the philanthropist shares in the company. If the worker is being paid $1 per day then the philanthropist can put aside $7300 worth of government bonds to fund this salary. The philanthropist can then demand $7300 worth of shares in the company.

The company should be happy with this because it gets free labor and companies want demand for their shares to be high. Labor for a company is a major obligation. Paying shareholders is optional. This means that the risks for a company is significantly reduced. It is more likely to want to hire more labor and this will reduce unemployment and aid in the reduction of poverty.

The worker is happy because he has a job that provides a stable income. The only damage that is being done is being done to the philanthropist who no longer has converted a stable income into an unstable income from dividends from shares. In other words, the philanthropist will be exposed to more risk.

However, the damage should be very little because wealthy people tend to want to increase risk on their investments anyway because more risk means more return. In the long run, history shows that the returns on the stock market are higher than the returns on safer assets like government bonds. Therefore, there is a reasonably good chance that the philanthropist will make even more money, and because his gains will be in the form of capital gains rather than income, he will get tax benefits as well.

This idea works because rich people are in more of a position to take risk than poor people. Rich people can take risk because they can afford to. If something goes wrong, they have a lot of money to bail them out. A poor person cannot take significant risks because he needs a steady income to buy essentials like food. The relationship between a poor worker and the philanthrophic investor in this scenario is similar to the relationship between an insurane company and a client. An insurance company has vast pools of money that can be paid out to clients to fund some expensive disaster (e.g. if you crash your car or if something is stolen from your house) but in return the client pays the insurance company a regular amount.

Giving Money to Bums

Whenever I walk around in the city I always see bums sitting on the pavement. I feel sorry for many of these people, especially if they are young, female, and shivering--but many colleagues warn me not to give any money to these bums because, apparently, the money is likely to be spent on illicit drugs or alcohol rather than food.

I currently use my credit card to regularly give the humanitarian organization World Vision a regular amount every month. The hope is that a humanitarian organization like World Vision will use the money to provide for the poor useful things like food, water, and shelter rather than alcohol or cocaine. World Vision Australia is audited by PricewaterhouseCoopers (PwC), the same external audit organization that audits Victorian Government entities to make sure they are in compliance with public sector regulatory requirements. World Vision also has an internal compliance team.

I have a lot of faith in large organizations. I have a lot of faith in government and trusted corporations like Google, AAMI, Commonwealth Bank, and so forth. It's not that I am naive. I am sure there are elements of corruption in any large bureaucracy, but I also think that the incentives are there for shareholders, voters, and clients to establish frameworks to hold agents accountable for what they do. In corporations, executives are accountable to the board of directors and to shareholders. In government, the bureaucracy is accountable to the legislature, which is accountable to the voting public. In many prosperous countries there are checks and balances or institutions that put a limit on fraud and ensure things work. Even though I have no idea what is in the food I eat, I trust that government regulations ensure there is nothing harmful or poisoning in my food. Even though there is no guarantee the judiciary will continue to fair and impartial, I trust that contracts will be honored and anyone who breaks the contract will be punished under the law. Even though I know little about climate science, I trust mainstream scientists when they say climate change is a worry.

Back to the topic of giving money to bums--talk about being sidetracked!--I have recently wondered about the merits of handing over cash to bums on the street. As much as I trust World Vision, I do think that charity, like investments, should be diversified, not only to diversify away corruption risk but also to spread the money around in the interest of fairness.

More Jobs, Less Cash Handouts

I am a believer that the best way to help the poor is to give them a job. While the trend nowadays is for people to be cynical and pessimistic in the topic of charity, I am an optimist because I think much progress has been made and the world is getting better and better. I believe that the world is a much better place now mainly because of the rise of India and China, countries with massive labor markets that are liberalising their labor markets to give the poor access to employment. If countries in Africa were to liberalise their labor markets and essential copy China's emphasis on exploiting cheap labor, I think Africans will experience a massive escape from poverty. I think the opportunity is there because wages in China and India are starting to rise and multinationals searching for cheap labor may have to look elsewhere--perhaps Africa--for cheap labor to make shoes, t-shirts, and other essentials we buy. The problem with many African governments lies in the governments there. I am hoping that one day there will be stablility and harmony in Africa so that multinationals will feel comfortable hiring labor.

Worker Benefits Destroys Jobs

In developed countries like Australia, it is surprising to see bums on the streets. Many might wonder why these people don't simply get jobs and start working like normal people do. The answer may be that government regulations give workers benefits like minimum wages and holidays. It is brillant for workers that the government force employers to give holidays (annual leave) and sick leave, maternity leave, superannuation, and so forth, but employers are not happy. These benefits for workers make it less profitable for employers to hire workers, and if workers are costing employers money, they will have to compensate by hiring fewer people. Why would BHP Billiton hire a bum who may only give $10 per day of value when that bum may cost, say, $50 per day in minimum wages, sick leave, superannuation benefits, and so forth? In my opinion, in an ideal world, there should be no minimum wage, no superannuation, no sick leave, no holidays, no maternity leave, and perhaps the government should subsidize companies who hire workers rather than punish them by imposing payroll tax. I am aware these policies will never materialize because of political reality.

Begging as Working

If I hand a bum on the streets some cash, I can help the poor because I am effectively giving this bum a job. Because this is a cash transaction done without government oversight, I effectively pay this bum a low wage for the job of sitting around in the cold. Because there is no government oversight, there is no superannuation I have to pay him, there is no sick leave or holidays.

The Problem of the Rich Bum

There are some objections. One objection to giving money to bums is that the bum may not be poor. The bum you see on the streets may be a bum during the day but when it's night he goes home to his mansion to sleep on a bed only to wake up the next day and start begging again. The risk of giving money to a rich bum is greatest if the payoff from being a bum is high and the costs are low. The cost of being a bum includes being cold and suffering from shame. Some people have no shame so the only creditable pain from being a bum is from the cold. Therefore, it is safer to give money to a bum who is shivering and looks like he is cold. This is because a rich bum would rather stay at home where he has ducted heating rather than shiver in the cold. An authentic bum is so despearate he is willing to work for money, so a way you can filter out rich bums is to subject them to pain. By subjecting themselves to pain, they signal to others that they are authentic bums rather than rich bums. If you see a shivering and cold bum on the streets, he or she is likely to be authentic. If the bum is wearing lots of clothing, it pays to test the bum. For example, talk to the bum and say, "I will give feed you dinner tonight if you take off most of your clothes and walk with me to the restaurant." If the bum is rich, he won't bother taking off his clothes and shivering while he walks to get his next meal. If he is an authentic bum, he will agree to do this.

Rich bums may exist because the payoff from being a bum may be high. If people only give bums $1 a day, you can be fairly certain that only poor people will beg for a living because no rich person in his right mind would work for $1 a day when he could do something else and earn more. However, some bums may be so effective at begging that they may earn, say, $200 per day. This is a major problem. Even if you subject a bum to pain to test the bum (e.g. make the bum walk to the nearest restaurant with little clothing) the pain may be worth it if he is being paid $200 per day for it. One potential solution is to give bums perishable food rather than money. If you see a bum but don't have any food on you, ask the bum to follow you to a cafe where you will buy the bum some cheap and perishable food or beverage. The problem with this is that it can be a lot of effort on behalf of the donor. Not many people have time to walk a bum to a cafe and buy her food.

A quick technique for testing to see if you are giving money to a rich bum from an authentic bum is to offer to buy her clothing off her. Especially on a cold day, clothes are necessary to protect you from the elements. If a bum is willing to give up his clothes for a small amount of money and thereby be subject to pain from coldness, he is likely to be an authentic bum. When you see a bum, you can say, "That jacket you're wearing looks nice. I will buy it from you for one dollar." If you are talking to a rich bum, she won't accept the offer because her comfort is more important than the money. If you are talking to an authentic bum, she will likely accept the offer because she needs that money so badly for food that she is prepared to subject herself to pain from coldness. A bum will always have clothes you can buy. He the bum is naked, he probably deserves your money anyway. You can buy not only the jacket but also shoes, gloves, and socks.

Make Bums Work for Pay

Many people think bums deserve to be bums because they don't want to work. This is unfair because minimum wage laws and other government interventions do not give an incentive for businesses to employ cheap labor.

However, I don't think you should give money to a bum who just sits around. You must subject them to tests so that they work for their pay. Below are some ideas:

- offer to buy their clothes (socks, shoes, jacket, etc) for a low cost so that they suffer pain from coldness

- get bums to do a certain number of pushups before you give them money (you can usually infer willingness to pay by looking at how much the bum sweats)

- give a bum a free copy of the bible and tell her to read, e.g. the Book of Genesis, and then the next time you see her you ask her some questions about Genesis to ensure she has learned it, and then do the same thing for Exodus, Leviticus, etc until the bum has studied the whole bible.

Webcam Philanthropy

A great idea for World Vision is to allow members to test the recipients of charity to see whether they are genuinely poor. For example, a World Vision employee can walk around in a poor area with a laptop and a bag of cash. The employee asks for a poor person to come along. This poor person is then recorded with a webcam and someone like me, the donor, looks at this poor person via the webcam. I then type in my computer what tests I want the poor person to do, e.g. 10 pushups, run on the spot, and so forth. Then when I think the poor person has done enough work to deserve cash, I can use Paypal to wire the money to World Vision who then give the same amount in cash to the poor person doing the pushups. I will pay the poor person just enough so that he can live, e.g. assume that you need about $1 a day to buy food to live, then that means you should get about 13 cents per hour assuming a person works for eight hours a day.  Therefore, a person should get about 1 cent per five minutes. I will then subject a poor person to five minutes of pushups and then pay him or her 1 cent for this.

This I think is a corruption-free method of giving to the poor. There is perfect signalling because I am getting the poor person to work for his money, therefore separating poor from rich. There is perfect accountability because I can see with my own eyes the poor person working. When I transfer to the money to World Vision, the charity organization must hand that exact same amount of money to the poor person and I must see it on the webcam.

Obviously World Vision needs to make some money from this to pay for the cost of the laptop, webcam, workers, and so forth, so for every $1 that is transferred to World Vision by members, say, 97 cents will go straight to the poor in cash.

This is a brilliant business idea. Anyone is free to establish this idea. If nobody does, I will try to establish it in the future once I feel secure enough to start a business. This business will not make much money. If you take 3 cents of every dollar that a donor gives, that's not much, and competition may drive this profit down even more to say, 1 cent for every dollar given. But this business idea is not designed for profit (it's designed to help the poor), so if I can get the profits from this business to simply cover bare costs (e.g. the cost of the laptop, etc) and thereby make zero profit, that will be good enough.

Problems with Webcam Philanthropy and Solutions to Those Problems

I've thought about this idea some more and there are some problems with it. One problem with this idea of getting World Vision to cover the costs by taking a percentage of whatever is donated is that a particular donor may ask for a poor person to do a lot of work but not pay anything. To discourage this, it is important for World Vision to charge a time-based fee, say a few cents per minute depending on the cost of the laptop, etc. Furthermore, a recipient of the money can decline if he or she wants to. For example, if a donor offers $1 but in return the recipient must do one million pushups, the recipient may deem that to be unreasonable, decline the offer, and the donor will be randomly allocated to another webcam. The donor cannot waste time by not giving anything because he will be paying a variable fee based on time and this fee is used to pay the cost of doing all this. There needs to be bargaining power on both sides for this market to work.

Another problem is if there is coercion. For example, suppose an abusive husband orders his wife to go to a World Vision webcam and do whatever the donor on the othre side of the webcam wants for money. The wife who is a victim of abuse may go to a World Vision webcam and then do 100 pushups for $1 and then when she gets that money she goes back home and gives $1 to the husband. The way to make sure the wife benefits from this money is to give the donor the option to pay in food and to watch via webcam the recipient eat the food. For example, the donor offers to pay $1 worth of rice to the recipient in return that the recipient does 100 pushups. After doing the 100 pushups the donor transfer $1 over to World Vision who in turn give $1 worth of rice to the woman in real time and then the recipient eats the rice then and there while the donar watches her eat the rice. This is useful if the woman has children. You cannot make children work because of child labor laws, so the mother can instead bring these children along and show them via webcam to the donor and the donor can give the mother rice that she eats then and there and gives to the children. The children eat then and there in front of the webcam and the donor can monitor this.

Another problem is that some poor people may be better than others at doing pushups. For example, a pregnant woman cannot do pushups easily. This can easily be fixed by giving the donor the ability to get the recipient to so other easier things like situps, starjumps, or even getting the recipient to sing. The donor can even type some other novel task if he wants to. This ensures accountability and freedom and makes sure the donor can dictate exactly how his own money should be earned.

Webcam Busking

How can this idea be sold to people? You need to take something that is already familiar to them. Busking is a concept that has been around for a long time. According to Wikipedia, busking is "the practice of performing in public places for tips and gratuities." That is esentially what I am advocating, but I want the idea to be carried out online so that more money can go to the poor.

I have Googled "onling busking" and the idea has already been touted by other people, but what other people are suggesting is not good. Most of what I have read online involves a musician recording his own music and then posting it online and asking for donations. This is not good because a rich person can easily make his own music, record this music, upload it online, claim that he is poor, and then ask for money. He only needs to perform once and then he may make millions. What I advocate is donors giving money to performers in real time so that there is accountability. When I log into World Vision's online busking area, I want to be able to be able to browse through many buskers and then watch a busker of my choice via high-definition webcam. While watching I can give money and when I do, in real time that money must drop near the person and the money must be visible to the donor via the webcam. If I drop, say, a $1 coin then I must see that $1 coin dropping. As I said before, giving food may be a better idea. It may also be a better idea if the donor can see the busker eating the food in real time.

When you are browsing to see which busker to watch, I think it would also be a good idea to allow people to see how much a particular busker is getting paid in terms of hourly rate. This will make the whole thing more equitable so that donars can target those buskers who are not paid livable wages. The currency for this will be in dollars (maybe US dollars or maybe even in gold given how much the US dollar has depreciated lately) or in rice. Donors can see how much each performer is paid in dollars per hour or grams of rice per hour.

It would be best if donors can give money via Paypal. They can initially put busker credits into an account and then this account balance goes down as the donor gives money or rice to a performer in real time. I think to get this idea going there should be no fee paid at all. Instead, ask for donations and say that donations will allow new performing rooms to be created. A performing room is simply a room where the poor person performs. It is just a room with a computer and a webcam. A machine that gives out money or rice would need to be made as well. Probably the most expensive part of this is the real estate. Make it so that anyone who donates money to build a performing room gets to name the room. If it's quite expensive to make a room and multiple people donate money to create a room then maybe make it so that the person who contributes the most money names the room but other donors may write their names or put an advertisement on the wall. This I think should encourage many companies to help out so that they can advertise.

Fair Trade Ethanol Fuel

Here in Australia they are starting to sell E10 petrol you can fill into your car. E10 is 90% petroleum and 10% ethanol. E10 is cheaper than normal petrol but less efficient. You can use it in any normal car with fuel injected engine without conversion. Most ethanol is produced in America and Brazil, but I think it would be great if, like tea and coffee, ethanol can be created in very poor countries and consumers can opt for a fair trade brand, allowing motorists to support employment in poor countries while driving their cars.

Copy China: How to Beat African Poverty

What is needed to really spread prosperity is to give these poor people jobs. This was how China stood up from poverty to prosperity: hundreds of millions migrated from the country to the city to work in low-paid job and bit-by-bit they became rich.

I would really like to see the same thing happening in Africa, but unfortunately Africa is a dry, harsh place filled with conflict and corrupt governments. Most people have given up on Africa but I think if we copy China we can rescue Africans from poverty.

Simply, we set up in developed countries like Australia, America, Canada, or England zones in secluded area where Africans can live. For example, in Australia, a wide area of outback desert can be deemed a Special Economic Zone. The government can then subsidize mass migration of Africans from Africa to Australia (or any other developed country) and put them in this Special Economic Zone. In this economic zone, companies like Nike, Reebok, and other manufacturers can employ African labor for very low costs, competing with the Chinese. Slowly, African wealth will increase. As the Australian government taxes companies 30% of profits, the government wins as well. Companies win because they have access to an even greater pool of cheap labor. Everyone wins.

Because the Africans are working in countries like Australia and America, corruption will hopefully lessen and businesses will have confidence hiring labor. Labor moving from Africa to developed countries mirrors the migration of peasants from rural China to the cities.

I understand that politically speaking many racists may not want mass migration of Africans and that unions may not want the increased competition to decrease the wages of their workers. Nevertheless, the massive tax revenue that can be collected from this activity can be used to effectively buy the votes of these groups of people, and I am hopeful that voters will think that the benefits of finally freeing the world from poverty is more important than the cost of losing a few manufacturing jobs here and there. Manufacturing jobs are already dead in rich countries anyway. If the Asians are already taking American jobs, why not bring the Africans in?

Criticism of Kevin Myers's Comments on Africa

I would like to talk about a recent piece by Kevin Myers titled Africa is Not Giving Anything to Anyone -- Apart From AIDS. It was published in the Irish Independent.

I myself give a considerable amount of money to the starving and I'm sure most of that money goes to Africa. Myers however refuses to give money. He says, "It is nearly 25 years since Ethiopia's (and Bob Geldof's) famous Feed The World campaign, and in that time Ethiopia's population has grown from 33.5 million to 78 million today. So why on earth should I do anything to encourage further catastrophic demographic growth in that country?"

The idea here is that the Ethiopians are breeding too much. Given that there is limited food, creating more mouths to feed means each individual gets less food. However, this ignores the reality that in many poor countries there are no institutions set up to give welfare to people. As a result, poor people must breed in order to increase the size of their family and therefore increase the strength and stability of their lives. In many poor countries it is tradition that individual take care of their parents in old age. Thus producing children is a way of providing yourself a pension.

Since most poor people live agricultural lifestyles rather than urban lifestyles, producing more children gives more labor, which in turn can produce more food.

Myers also forgets to demarcate between government and citizens. He says, "Even as we see African states refusing to take action to restore something resembling civilisation in Zimbabwe, the begging bowl for Ethiopia is being passed around to us, yet again." Myers is assuming that because Africans are not intent on civilizing then people in rich countries should help Africans become more civilized by feeding them. Many African governments may not be keen on civilizing Zimbabwe, but the collection plate is being passed around by many organizations that have nothing to do with African governments, e.g. NGOs like World Vision, Care International, and Oxfam, and furthermore, these NGOs are helping African citizens, not African governments. Myers believes that because African governments are guilty then therefore the African people are guilty as well. To use this argument on Germans during World War II, it is like saying that because Nazi Germany has a poor history on human rights that it would be wrong for American soldiers to try liberate Jewish victims of the Holocaust who were German citizens.

Myers's comments are the end are especially horrific:

[Poverty in Africa] is inspiring Bill Gates' programme to rid the continent of malaria, when, in the almost complete absence of personal self-discipline, that disease is one of the most efficacious forms of population-control now operating.

If his programme is successful, tens of millions of children who would otherwise have died in infancy will survive to adulthood, he boasts. Oh good: then what? I know. Let them all come here. Yes, that's an idea.

Myers is saying that malaria needs to work it course because it kills people and killing people is good because the world is overpopulated. Many people want Africans to die and they often use the environmental argument. To test whether they really do care about the environment versus whether they simply hate Africans, you apply the same policies to non-Africans. If Myers wants the poor to fend for themselves against diseases, he must want to same thing for non-Africans (e.g. Europeans), which means that he believes infections in Ireland should run their course and kill children. He would necessarily believe that a European child who is disabled and cannot work to feed himself must be left to die.

The fact that at the end Myers suggests that bringing Africans into Ireland is a bad idea backs up my suspicion that Myers hate these Africans not because of environmental degradation (that is likely just an excuse). Rather, he hates them because they are African.

Ethical Purchasing: Buying Unilever Products

I was at the supermarket today purchasing tea. I drink a lot of tea. I am not a coffee man. One of the issues that annoy me is whether tea is good for you or not. Some people say tea is good for you while others claim that the caffeine is bad for you.

Nevertheless, I was at the supermarket deciding which tea I wanted to get. I don't particularly have any brand loyalty. As far as I see it, tea is like petrol. It is more or less the same no matter which brand you buy. I normally purchased black tea from Tetley but I decided instead to buy tea from Lipton. The reason why is because Lipton is owned by Unilever, and I know from playing Free Rice that Unilever helps feed hungry people by aiding the UN World Food Programme.

I decided then to exercise my ethical purchasing power by buying tea from Lipton. I believe that if enough consumers make purchasing decisions based on how ethical the company seems it can give companies a very strong incentive to do good.

Myanmar Cyclone and Chinese Earthquake

Last month I calculated my net worth to be $32,746. Right now with the improvement in global stock markets that would probably be around $33,000 or $34,000 if I'm lucky. I have given about $350 to charity so far this year.

Giving to charity for me is a difficult thing and I have mixed feelings about it. I would love to be able to give more of both my time and money but I do realize that at this stage in my life I need to save up.

The charity I would most like to give to is the World Food Programme since I consider starvation to be the worst pain that could be inflicted on a human. However, WPF is a non-Australian organization and as a result there is complexity of whether my donation is tax deductable. To get around this, I donate instead to Unicef Australia. I hate to be superficial but I really don't like Unicef Australia's website. In my opinion, the humanitarian organizations that operate in Australia that have nice-looking websites are Care Australia, Oxfam Australia, and World Vision Australia. Of all these Australian humanitarian organizations only World Vision offers child sponsorship. Australians collectively sponsor 400,000 children. What I like about child sponsorship is that donors have the ability to one day visit their sponsor child, which allows them to see first-hand whether the child is treated well by the aid organization.

Hopefully in the future I might get an opportunity to actually volunteer my time to worthy causes. This may not be a waste of time since I will be able to put such an experience on my resume.

Charity as Punishment

So far in 2008 I have given about $200 to charity. The way I give to charity is slightly unusual. I force myself to give to charity if I have sinned. When I use the word "sin" I am not talking about religion. Rather, I sin when my actions do not reflect my intentions or my ideals about how I should be. I will not be specific about my ideals about what I should do, but let's just say it's similar to this: I should exercise X hours per week, study Y hours per week, invest Z dollars per fortnight, and so on. I use a spreadsheet to record the quantity with which I am doing all these things and if I am deficient, I punish myself by giving to charity using my credit card. I hate losing money, so this drives me to become ideal.

When I give money to my parents, I do not count this as charity because really I am compensating them for my living expenses, e.g. water, electricity, and food.

Figuring out how much I am donating with Kiva loans was also difficult because the money I give will eventually come back to me since it is a loan. I decided to count as a donation the interest that I lost. I assume that I can earn 8 per cent on investments, and since Kiva gives no interest then I lose 8 per cent.

Hedonism for Hunger

In feminist B--ch Magazine there is an article called Tree So Horny about a group called F--- For Forests, which explicitly uses pornography and sex to raise money to save forests.

I wonder why the same concept cannot be applied not to fighting against deforestation but to beat world hunger. I have already thought of a name for the group, Hedonism for Hunger where participants engage in hedonistic acts for the sake of raising money to fight world hunger. The money raised can go to the World Food Programme just the profits from Free Rice does.

Many people feel guilty engaging in acts of hedonism. However, if the hedonism is for hunger then that gives people a good excuse.

One of the main problems of the sex industry I believe is the fact that it doesn't cater to shy virgins. I suspect a large number of young virgin males and females would like to go to a brothel but are bothered by the high costs, the embarrassment, and the fear of being ridiculed for their inexperience.

High costs can be fixed through economies of scale. Thousands of clients can be lined up on a conveyor belt and a handful of sex providers can give the service to each quickly.

The problem of embarrassment can be fixed with guarantees of anonymity. A brothel may encourage all its customers to wear rabbit masks upon entry. In public someone wearing a rabbit mask will look like he is going to a fancy dress party, so the individual wearing the mask will not be too embarrassed.

William Easterly: Practitioner of Pessimism

Link: Easterly on Growth, Poverty, and Aid

I want to share with people here some comments I made at EconTalk on Russ Robert's interview with former World Bank boss William Easterly. Easterly is a pessimist who believes that foreign aid does not work. You can go to the link I gave above to download an audio file that contains the interview. I listened to this interview on my Mp3 player while I was on the train to university today.

Easterly says initially that aid to Africa does not work. The evidence he gives is that about $60 trillion dollars has poured into Africa in the last 60 years and in those 60 years economic growth has been zero. However, this itself does not prove that the aid did nothing. What if without the aid Africa would have experienced negative growth? That lots of aid comes in and results in little growth does mean that the aid did not affect growth. Perhaps another variable negatively affected growth so much that it masked the impact of aid on economic growth in Africa. This is the problem of correlation versus causation. However, Easterly and Roberts, later in the podcast, talk about this problem of correlation versus causation, and Easterly himself criticizes another economist for confusing correlation and causation!

Easterley also says that he believes in freedom and thinks that countries should decide themselves whether they want freedom. He says that in many countries, such as in Latin American countries and even in Russia, the culture or values just aren't there for free markets. He claims that people there simply don't want their economies to be liberalized and therefore it's best to give people what they want. His evidence comes from the fact that left-leaning leaders tend to be popular. Roberts did say that if the democratic system is flawed (e.g. if it is hijacked by elites or thugs) then it may be difficult to know what the people want since it is assumed that the democratic system of voting and elections will tell us what "the people" want. However, it's not as simple as that. As Sowell says in another podcast, there is no such thing as "society." Arrow's Impossibility Theorem proves mathematically that there cannot be a social preference. It backs up what is obvious from the beginning, and that is there is no society, only individuals. To quote Margaret Thatcher: "There is no such thing as society. There are individual men and women, and there are families." I'd even go so far as to say there is no family since a family too is just multiple individuals. But one step at a time.

Suppose 60% of citizens vote to be slaves and 40% vote to be free. If slavery were imposed on everyone because the majority wanted it, then those 40% who didn't want slavery would still get it. This is the problem.

Easterly is against the idea of forcing freedom upon people because, as he claims, forced freedom is oxymoronic or contradictory. However, I believe forcing freedom upon people is better than forcing slavery upon people and also I believe forcing freedom upon people is better than forcing slavery upon people even if most people wanted slavery. The reason why is because forcing freedom upon people Pareto dominates forcing slavery on people. Suppose 60% of people want freedom while 40% want to be slaves. If slavery is imposed, then everyone who wants slavery gets what they want but those who want freedom don't. However, if freedom is imposed, those who want freedom get what they want but those who want to be slaves have the freedom to reject freedom and privately arrange among themselves to be slaves. Thus nobody is worse off if we force freedom upon citizens.

Blood Diamond (2006)

Today was a stay-at-home day for me, which means I spent the whole day indoors in my house. The main thing I did today was watch the movie Blood Diamond. What's the verdict? It's a good movie. I watched the movie with my mom. I suspect my mom wanted to watch this movie because she liked watching Leonardo DiCaprio in Titanic and wanted to see him again. Before the movie started, I tried to warn my mom that this movie was very violent. I knew because the classification or rating said so. It is rated R by the MPAA and MA15+ in Australia.

Blood Diamond turned out to be much more gruesome than I expected. There are endless scenes of killing and bloodshed, including limbs being chopped off children, bodies sprawled all over the road, mutilated corpses hanging from trees, and so on. Some of the scenes were excruciating, and I'm very sure my mom was not happy with what she saw. In spite of this violence, Mom watched the entire movie and she seemed quite moved by the ending. It's often very difficult for any movie to sustain my mother's interest for so long. Usually she'd get tired and walk away.

Blood Diamond also made me curious about real-life blood diamonds. Even if the specific plot is not real, the background, that is, the Sierra Leone Civil War, and the role of diamonds in funding the conflict, is all real. The rebels in Sierra Leone also made use of child soldiers. This conflict in Sierra Leone reminds me of the conflict today in Darfur and the Congo. However, in Darfur, the conflict is not over diamonds but over oil. The De Beers Corporation claims that, with the establishment of the UN's Kimberley Process, blood diamonds are a thing of the past. Even if there are assurances from certification processes, I am still wary about diamonds and to be on the safe side I myself vow never to buy diamonds ever. One reason for this vow is because I fear I may fund murder and rape. Another reason is because I believe that it's silly to buy for a woman an expensive and useless stone.

Is Bono Hypocritical?

I was browsing through Yahoo! Answers and found someone there who believes Bono is hypocritical for helping the poor because he has a net worth of $200 million. Since when it is hypocritical for a rich person to help a poor person? Why must only poor people help themselves?

There are many male feminists around. In fact, the first feminists were men just as the first ones who railed against slavery were white. Also, just about all of those who fight for animal rights are humans. Often those who need liberating do not have the power to liberate themselves. It takes those in power to help those who are vulnerable.

It is not unusual for rich people to help poor people. In fact, rich people, who have more money, are more capable of helping the poor since they are able to give up much more. Bono's wealth comes from his celebrity status, which draws a lot of attention. He uses this to help the poor by drawing attention to the problem of world poverty.

According to Google, a hypocrite is "a person who professes beliefs and opinions that he or she does not hold in order to conceal his or her real feelings or motives." If a man expressed a desire to liberate females, then his being male does not make this desire less genuine. Therefore, there is not necessarily any hypocrisy.

Bill Clinton on Kiva Microcredit

Bill Clinton talks about Kiva, a site where you can make small loans to people in poor countries. Giving a microloan to poor people may be a very effective way to get them out of poverty.

Microlending has very low default rates. According to Kiva, of every 1000 loans given, only 3 default.

Hallmark Red Ad

If you buy a Red Product, a percentage of the profits go to The Global Fund, which helps treat and prevent AIDS, malaria, and tuberculosis in Africa. In the last year, $50 million was raised for The Global Fund.

The Red Project, a creation of U2 singer Bono, tries to use the power of commercialism to make charity sustainable.

Food Force: Simple and Educational

Link: Food Force

Force force is a game made by the UN World Food Programme that gives players a taste of what it would be like to carry out a humanitarian relief program. Players fly a helicopter to find starving people, make food, buy food, drop food, drive trucks through rough terrain, and then assist the community afterwards.

The game is very simple. Even children can understand how to play it without too much hassle. It is not a serious computer competitive game like Quake or Unreal but more of an educational game. It is completely free to download although at about 200 MB be sure to have a fast Internet connection. It would be a great idea for teachers to let their students play this game for educational purposes.