Tuesday, 6 January 2004

On The Edge Of Lunacy

It's that wonderful invisible hand - shafting all of us little people and selling this world to greedy selfish bastards. Nice.

by George Monbiot

George Monbiot Spare a thought this bleak new year for all those who rely on charity. Open your hearts, for example, to a group of people who, though they live in London, are in such desperate need of handouts that last year they received £7.6m in foreign aid. The Adam Smith Institute, the ultra-rightwing lobby group, now receives more money from Britain's Department for International Development (DfID) than Liberia or Somalia, two of the most desperate nations on Earth.

Are the members of the Adam Smith Institute starving? Hardly. They work in plush offices in Great Smith Street, just around the corner from the Houses of Parliament. They hold lavish receptions and bring in speakers from all over the world. Big business already contributes generously to this good cause.

It gets what it pays for. The institute's purpose is to devise new means for corporations to grab the resources that belong to the public realm. Its president, Madsen Pirie, claims to have invented the word privatisation. His was the organisation that persuaded the Conservative government to sell off the railways, deregulate the buses, introduce the poll tax, cut the top rates of income tax, outsource local government services and start to part-privatise the national health service and the education system. "We propose things," Pirie once boasted, "which people regard as being on the edge of lunacy. The next thing you know, they're on the edge of policy." In this spirit, his institute now calls for the privatisation of social security, the dismantling of the NHS and a shift from public to private education. It opposes government spending on everything, in other words, except the Adam Smith Institute.

So what on earth is going on? Why are swivel-eyed ideologues in London a more deserving cause than starving refugees in Somalia? To understand what is happening, we must first revise our conception of what foreign aid is for.

Aid has always been an instrument of foreign policy. During the cold war, it was used to buy the loyalties of states that might otherwise have crossed to the other side. Even today, the countries that receive the most money tend to be those that are of greatest strategic use to the donor nation, which is why the US gives more to Israel than it does to sub-Saharan Africa.

But foreign policy is also driven by commerce, and in particular by the needs of domestic exporters. Aid goes to countries that can buy our manufacturers' products. Sometimes it doesn't go to countries at all, but straight to the manufacturers. A US government website boasts that "the principal beneficiary of America's foreign assistance programs has always been the United States. Close to 80% of the US Agency for International Development's contracts and grants go directly to American firms."

A doctor working in Gondar hospital in Ethiopia wrote to me recently to spell out what this means. The hospital has none of the basic textbooks on tropical diseases it needs. But it does have 21 copies of an 800-page volume called Aesthetic Facial Surgery and 24 volumes of a book called Opthalmic Pathology. There is no opthalmic pathologist in training in Ethiopia. The poorest nation on Earth, unsurprisingly, has no aesthetic plastic surgeons. The US had spent $2m on medical textbooks that American publishers hadn't been able to sell at home, called them aid and dumped them in Ethiopia.

In Britain the Labour government claims to have abandoned such practices, though only because they infringe European rules on competition. But now it has found a far more effective means of helping the rich while pretending to help the poor. It is spending its money on projects that hand public goods to corporations.

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