The Poverty of the United Nations; L. W. Reed

Ideas and Consequences The Poverty of the United Nations T wenty years ago, a United Nations report listed the United States as consuming 115,540 kilowatt-hours of energy per person per year. At the same time, each person in the tiny central African nation of Burundi was using up just 120 kilowatt-hours. My guess is that today, the average American is still con suming about a thousand times as much ener gy as the average Burundian. It's also a safe bet that the "experts" at the United Nations want Americans to feel just as guilty about the disparity today as 20 years ago. Is this something about which Americans should flog themselves in unremitting guilt? Does Burundi use less energy because Amer ica uses too much? Is world energy a fixed pie, with America greedily hogging more than its quota at the expense of the Burundis of the planet? Would Burundi be better off if Amer ica impoverished itself? Questions like these were answered definitively by freemarket economists decades ago, but like a nagging mother-in-law, the questions just never go away.

You've heard this international class war fare stuff before, from many sources besides the United Nations. A few years ago, the mantra of the international statist communi ty-repeated endlessly in the media-was this: "Americans are only 6 percent of the world's population but they consume 40 per cent of the world's energy." Greed was supLawrence Reed is president of the Mackinac Center for Public Policy (www.mackinac.org), afree-market research and educational organization in Midland, Michigan, and chairman ofFEE's Board ofTrustees. 14 by Lawrence W. Reed posed to be the explanation for this disparity, and the solution offered was for America to spread its wealth in foreign-aid gifts to the less fortunate countries of the world. Energy, of course, wasn't (and still isn't) the only thing of which America consumes more than its share of global population. We also eat more than 6 percent of the world's potato chips and broccoli. We enjoy more than 6 percent of the world's indoor plumbing, hearing aids, and baseballs. We operate more than 6 percent of the world's cars, trucks, hang gliders, tricycles, and skateboards. We listen to more than 6 percent of all lectures and read more than 6 percent of the world's books. And we probably put up with more than our share of nonsense too.

The fact is that Americans consume more because Americans produce more. That's right-more than 6 percent of the world's potato chips, baseballs, skateboards, and countless other things. If we didn't first pro duce, we wouldn't have it to consume or to trade for what we really wanted. How can such an elementary point, such a basic princi ple of life and economics, be lost on anyone who doesn't have to sign his name with an "X"? Unfortunately, the U.N. is at it again. Last September it issued a document called "The Human Development Report 1998."The rich est fifth of the world's nations, declares the report, accounts for 86 percent of private con sumption. Never mind the inherently dubious nature of adding up "private consumption" in almost 200 different countries.

The report is yet another lamentation about how the rich have it and the poor don't: the richest fifth purchase nine times as much meat, have access to nearly 50 times as many tele phones, and use more than 80 times the paper products and motorized vehicles than the poor est fifth. While two billion people worldwide supposedly go without schools and toilets, self indulgent Americans are painting themselves with $8 billion in cosmetics and Europeans are feasting on $11 billion in ice cream. To reduce these horrid inequalities, the report recom mends that "consumption levels among the poor" be increased to "basic" levels. Think about that. The poor nations don't consume much now, and the U.N. tells us that the answer is for them to consume more. How are the poor nations to get more? Change their ways? Produce more, perhaps? If the U.N. thinks that poor nations' low productivity is at fault here, there's little sign of it. As the New York Times revealed, "the report only skirts the issue of what role the poorest nations themselves play in this predicament."

The sad fact is that in those poor countries like Burundi, indigenous political and cultur al barriers to production constitute the over whelming if not exclusive source of poverty. Routinely, the chronically destitute nations of the world are the ones that make war on pri vate property, keep out foreign investment, impose viciously punitive taxes and regula tions, spend inordinate sums on the military, squander resources on corruption and public works boondoggles, and in general, penalize or even kill anybody with enough spunk to start a business. These nations don't consume much because, as a result of these barriers, they don't produce much. It's as simple as 15 that. And it's no coincidence that reports to the contrary come forth from a world body in which the ranks of the benighted are legion. What poor nations need to do is to create the enlightened political and cultural condi tions whereby capital investment and the resulting production are encouraged instead of suppressed. This is not new information.

It's the same formula by which America emerged from the status of 13 poor backwater colonies to the wealthiest nation on the globe. With a relatively free economy, America has shown the world how to go from Model T's to space shuttles in less time than most peoples have taken to get from dirt paths to gravel roads. Other countries from England to Hong Kong can boast similar accomplishments as well, and for similar reasons. It is no disgrace that Americans consume 40 percent of the world's energy, or whatever the number may really be. Rather, it is a trib ute to our ingenuity, creativity, and enterprise. We've put our God-given abilities to work within a system that even with all its govern ment intervention is still infinitely more hos pitable to production than Burundi's. If we restricted our energy consumption to just 6 percent of the total world supply, our lives would be shorter, less healthy, and a lot more painful. There would be fewer of us, and not by choice. The rest of the world would be worse off too because poor people cannot materially do much to help other poor people through trade.

People who are interested in ending pover ty and really solving economic problems would do well to read Adam Smith's The Wealth ofNations and ignore any report that comes out of the United Nations. D The apple icon t identifies Freeman articles that are appropriate for teaching high school students several major subjects-including economics, history, government, phi losophy, and current issues. We also provide sample lesson plans for these articles on our Web site www.fee.org and in written form. Teachers and homeschooling parents need only to visit our Web site or request written lesson plans to take advantage of this unique service.