Acton Institute Powerblog

Good Intentions and Unsound Economics

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This Sunday I went to Mass at a parish I’d never attended before. I was quite pleasantly surprised—the music wasn’t bad, the rubrics were followed, the homily focused on the gospel, they chanted the Agnus Dei, and prayed the prayer to St. Michael afterward; not apparently liberal and better than many typical “suburban rite” parishes. But, during the petitions, one of the prayers was for leaders of nations, that they would eradicate poverty. Here is a classic example of the right desire, poverty eradication, and the wrong way to go about it, government. It also betrays the common misunderstanding that governments solve poverty. Now, leaders of nations and governments do have a role in poverty reduction. They need to create rule of law and enforce contracts. They can help reduce regulation and tariffs and open their borders to free trade. But leaders of nations do not eradicate poverty, nor does aid from the developing world. What eradicates poverty is business. Entrepreneurs and businessmen who create jobs and opportunity and wealth. Michael Novak called small business “the strategic vocation for helping the poor.”

The desire for poverty alleviation through government involvement is a prime example of good intentions combined with unsound economics. Many people have good intentions, but they don’t understand basic economics so they often support solutions without “thinking beyond stage one” as Thomas Sowell says. A prime example of this is the enormously popular One Campaign. Thousands of people are signing on to a good intention without knowing whether the proposed solution will bring about their desired outcome. Good intentions are a start, but they’re not enough and Bob Geldof is wrong when he says do something even if it doesn’t work.

If it doesn’t work—stop doing it. Activism shouldn’t be done for the sake of being active. This is the problem with too many Hollywood stars and other “professional” activists. Activism should have an end that is beyond itself, so if it doesn’t work, we should use our minds to apply reason to the situation and come up with a plan that might. C.S Lewis said that “progress isn’t going forward if you’re going in the wrong direction.” You’ve got to stop and turn around. Acton Senior Fellow, Jay Richards argues that the Bob Geldof idea is reflective of many who believe that their actions or policies will be either good or neutral, but never harmful. But despite what they may believe that is not the case. Often things that don’t work exacerbate the problem. Hence the Acton Message, Don’t Just Care, Think.

We need to have good intentions, but this is only a beginning. If we are going to care about poverty and economic policies then we should begin by taking economics seriously. Some books I recommend include Basic Economics and Applied Economics both by Thomas Sowell, and of course Economics in One Lesson by Henry Hazlitt. Bono is a force for good intentions, can you imagine all the good he could do if he connected his intentions to sound economics?

Michael Matheson Miller