I tuned in to the Conservative Party conference today to hear their session on development. Andrew Mitchell is the shadow secretary for international development, and his speech was very disappointing. The best way to solve poverty, in his mind, is to encourage trade and “galvanize the private sector” to produce growth. He is partly correct about this of course, in that growth will be required, and business is the simplest way to facilitate that. But he is wrong if he believes that people are poor because the pie isn’t big enough.
Unfortunately, he does, going on to claim that the Conservatives will be about “creating wealth, not simply redistributing it”. It’s depressing to hear this greeted with applause, when it can be proved that poverty will never be solved this way.
Why? Because although the wealth creation model of development works in the economics textbooks, it doesn’t work in real life, not for the people who need it most. The richest members of developing countries already hold all the power in business, so stimulating business in poor countries benefits the wealthy first. So little trickles down to the poorest members of society that ginormous amounts of wealth creation are needed to provide even a tiny rise in quality of life for the poor. It’s a recipe for massive inequality, but it is in fact literally impossible too:
For every $100 of growth in the global economy, just 60 cents reaches those living on less than $2 a day. The sad fact is that the world just isn’t big enough to create enough global wealth to help the poor through growth alone: “To get the poorest onto an income of just $3 a day”, says Andrew Simms, “would require an impossible 15 planets worth of biocapacity.”
Unfortunately, Andrew Mitchell seems to be unaware that he is committing the country to a policy that cannot possibly succeed. Policies that redistribute, that share the wealth, that move money from those with too much of it to those with too little, are the only ones that will work. If even Labour couldn’t spot that, it’s little wonder the Conservatives haven’t either.