William Easterly is a leading critic of traditional approaches to development—that is, of traditional approaches to bridging the Great Divergence. He, and everyone else studying development, want to know why and how the West and a few Western-influenced countries have become wealthy, and everyone else in the world has stayed poor, despite trillions of dollars spent fruitlessly over seven decades by the West to bring the poor out of poverty.
Easterly’s latest book focuses on the defects of autocratic technocratic development schemes cooked up by Westerners. Such schemes treat citizens of undeveloped countries as fungible pawns to be passively developed, and result in no positive outcome. Easterly suggests that superior outcomes are likely from instead empowering individuals in developing countries to make their own choices. Easterly’s core premise, the one around which everything in this book revolves, is that releasing the talents, ingenuity, hard-work and self-motivation of poor people from the bondage of central planning and repression of individual rights will allow those people to lead themselves out of poverty. He is a modern-day Moses, saying to the Pharaoh of the global development industry, “Let my people go!”
A prime service of this book is the historical perspective Easterly gives the reader. He discusses at length the origins and growth of the development industry (i.e., the complex of national and multi-national organizations that receive money from individuals and governments, and undertake to apply that money to the development of undeveloped countries). The reason the historical perspective is valuable is that the development industry thrives on ignoring the past. In the development industry, the focus is relentlessly on the future—on today’s Utopian plans that, with enough money from others, are promised to finally bring about the elevation of the poor, despite all the failures of the past seven decades. A current example of this focus is the UN Millennium Development Goals, pushed globally by a wide range of players in the development industry, perhaps most prominently by the Gates Foundation. The reason for the focus on the future, of course, is that a focus on the past would show what a gruesome failure the development industry has been for seventy years, and might even require accountability for all the trillions wasted and Utopian promises totally unfulfilled.
Easterly frames the book around what development should NOT be and do. To do this, he discusses at length the once-lionized, now-forgotten Nobel laureate Gunnar Myrdal. He posits a fictional debate between Myrdal and the not-forgotten Friedrich Hayek. Through that device, he analyzes Myrdal’s thought, showing three major pillars that underlie the development industry today. First, Myrdal held that every society is a blank slate, just waiting for a cookie-cutter solution to be imposed by outsiders, rather than a unique culture with its own unique needs and desires. Second, the focus in development should be on abstract national well-being rather than on the well-being of individuals. Third, technocratic government central planning rather than spontaneous individual action leads to development success. (Interestingly Myrdal’s highly successful response to his own critics at the time was to refuse to debate them and instead shriek that there was a “consensus” in favor of his views, so everyone who disagreed was stupid, not part of the development priesthood, and should just shut up—shades of today’s climate change alarmists.)
The rest of the book uses this three-part framework to analyze the modern development industry, with the conclusion that Myrdal was wrong on all counts and that his thought was in many ways the original sin that has caused the development industry to be a nearly total failure. Easterly’s writing is anecdote heavy. He writes in a jaunty style, as well—presumably his main goal is to keep the reader’s interest, while fitting anecdotes into his framework. This approach is pretty successful. Each of these pillars of the modern development industry (the blank slate; national well-being over individuals; and central planning over spontaneous activity) gets a thorough beating, though Easterly is careful to note that he does not promise an alternate utopia, merely a revised way of doing things that on average is likely to be more beneficial for people of the undeveloped world. Easterly also addresses possible counter-arguments, most importantly by pointing out that the few non-Western countries that have successfully developed, namely a set of Asian nations, are almost certainly not the result of some unique type of successful Asian autocracy, but rather the result of simple economic freedoms combined with technology.
One flaw of the book is that Easterly never considers whether it’s not just the technocratic central-planning and one-size-fits-solutions that are to blame, but also the people of undeveloped countries themselves. He does not consider if some cultures are simply not as good at, or totally incapable of, lifting themselves up by their own bootstraps. There is non-trivial evidence this is the case, and a cottage industry of writers to this effect. For example, the very existence of the Great Divergence suggests this conclusion, in that the tools that enabled the Industrial Revolution, where productivity soared om England and areas with an English-style culture, have not been adopted by much of the world in the past 150 years, even though there is no obvious barrier to doing so. Gregory Clark’s “A Farewell To Alms” discusses this extensively.
No doubt Easterly perceives a focus on cultural differences as pessimistic, and he is nothing if not an optimist. Easterly does recognize some cultural differences, in particular noting that some societies recognize individual rights, instead of collective rights, and that different levels of trust characterize different societies. He correlates lack of individual rights and lack of trust with lack of development—though as usual, he is cautious in drawing sweeping conclusions. But he does not consider more baleful and harder-to-address cultural characteristics such as high time-preference (i.e., laziness), certain religions inculcating fatalism and apathy, opposition to hard work (especially manual work for men, such as in Arab cultures), predilections for violence, inability to plan for the future, and lack of impulse control. All these characteristics are common in cultures outside the West and the Far East (and yes, I mean to use “Far East,” or alternatively “The Orient”). Such cultural obstacles seem nearly insurmountable, regardless of rights or other empowerment given to individuals, and it may well be the failure of the development industry is not due just to the wrong approach, but to the impossibility of the task. Perhaps where the culture needs outside help, it cannot use it; and where it can use it, it does not need it (which is pretty much the point of Angus Deaton’s “The Great Escape.”)
On a more specific point, reviewers strangely repeatedly criticize Easterly for his fascinating multi-century historical analysis of New York’s Greene Street. They frequently say it’s irrelevant and pointless. Nothing could be farther from the truth. It’s obvious to any open-minded reader that Easterly’s point (which he makes explicit, so it’s not hard to miss) is that the history of Greene Street shows how individual rights, such as those found only in America and a few other countries, lead to spontaneous individual decisions. And that those individual decisions, with individuals directly making choices and individuals organizing together in a democratic framework, maximize societal benefits—and, just as importantly, that government planning and blank-slate impositions, even if well-meaning, are likely to lead to much worse results. It is a microcosm of Easterly’s point about nations. Easterly’s history of Greene Street culminates in Robert Moses’s mid-century plan to demolish the entire area and turn it into a centrally-planned paradise (which, like all such paradises, would shortly have become a hell, just like the liberal-led technocratic destruction of urban ghettoes and replacement by high-rise public housing was a total disaster, now falsely blamed on supposed conservative racism). But Moses was stopped by Jane Jacobs, and Greene Street is now a wealthy, redeveloped area, purely as a result of individual actions and choices. Easterly means we should expand this microcosm to the globe. It’s certainly better than what we’ve been doing—as they say, the definition of insanity is continuing to do what has failed and expecting a different result. Bill Gates should pay attention.