U2′s Bono Says Poor Nations Need Capitalism, Not Foreign Aid

Bono from the legendary rock group U2 had a change of heart recently with regard to state-provided foreign aid. For years, he has been a leading voice, advocating on behalf of poverty-stricken, underdeveloped nations around the world. However, he has always urged governments to send tax dollars to countries run by brutal dictators who typically just intercept the aid dollars and use them to buy mansions and military equipment.

At a 2007 TED conference, Bono met with Ghanaian free-market economist George Ayittey, who explained some of the problems caused by the current foreign aid establishment and gave him a book on how free market economics will help Africa rise out of poverty. Apparently, Ayittey’s message eventually resonated with Bono. After advocating on behalf of foreign aid for years, Bono changed his position and, during a recent speech at Georgetown University, expressed, “Aid is just a stopgap. Commerce [and] entrepreneurial capitalism take more people out of poverty than aid. We need Africa to become an economic powerhouse.” Check out some video footage from Bono’s speech below, and let’s discuss foreign aid versus capitalism after the jump.

Egypt Demonstrates the Flaws of Foreign Aid

Most struggling nations suffer under authoritarian and despotic regimes. Warlords with heavily-armed soldiers tamper with the natural rights of their citizens, and this prevents the type of economic freedom that is necessary for the development of a strong market economy with a reliable flow of commerce. When aid dollars are sent to these regimes, there is little accountability as to what happens to the funds. Inevitably, dictators gain control of them and use them to buy weapons or luxuries, further exacerbating the initial problems that created the poverty.

As an example, America has been supporting the Egyptian government with foreign aid, and, in response, Egypt’s erratic, changing leadership has been using American-made weapons against the Egyptian people. Over the past couple of days, the political crisis between Egyptian citizens and the government escalated into violent clashes, resulting in hundreds of fatalities. In Egypt’s case, foreign aid benefits the military-industrial complex at the expense of poverty-stricken families. Egyptian protesters often hold up signs, criticizing America for supporting Egypt’s corrupt leadership with money and weapons and begging us to stop empowering the very people that are holding them down.

The Basics of Bono’s Message

Bono, one of the world’s wealthiest musicians, has used his status and riches to improve the lives of struggling people in developing nations for years on end. His own example proves the benevolence of capitalism. However, after decades of giving, he realized that people need true, lasting commerce in order to rise out of poverty. Handouts get consumed and eventually run out. However, investments issued to motivated, forward-thinking locals result in the development of businesses that provide lasting prosperity to the community around them.

Commerce strengthens local supply chains and delivers clean water and food to struggling people better than any system ever devised. Essentially, after spending decades trying to lift Africa out of poverty with aid, Bono finally realized that basic metaphorical principle that struggling people are better served by being taught to fish than by being given a temporary supply of food.

When wealthy individuals invest money in developing nations, the investors have a vested interest in keeping an eye on how the funds are being spent. Aid dollars tend to flow with no accountability, and the corrupting consequences can be seen each night on the evening news, as brutal dictators and wealthy warlords inevitably intercept the funds and use them to create havoc, social unrest, poverty, violence, and, inevitably, hatred towards whichever country issued the foreign aid.

Bono is right. It’s time to stop trying to fix poverty with band-aids. Handouts are to poverty what pharmaceutical drugs are to health and wellness. Capitalism, on the other hand, is metaphorically akin to preventing illness before it strikes through the development of healthy lifestyle choices. It’s time for governments to stop sending poor families’ tax dollars to wealthy warlords in developing countries. Instead, let’s look to microfinance and investment to lift individuals worldwide out of poverty. After all, everyone benefits when new workers, investors, companies, and consumers rise from the ashes of despotism and oppression.

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