Discover more from Ideas Beyond Borders
Dignity First: An Interview with Dr. Tom Palmer
We spoke with with one of our valued Board of Advisor members about his libertarianism, his latest book, and how to best advocate for liberty in the Middle East.
Dr. Tom G. Palmer is an American academic, and libertarian activist. He is a Senior Fellow at the Cato Institute, a think tank focused on libertarianism and free market policies, and as the Executive Vice President for International Programs at the Atlas Network, a non-profit organization that supports pro-liberty think tanks around the world and a partner of Ideas Beyond Borders. Dr. Palmer is also one of IBB’s Board of Advisor members, and we recently translated his book, Development with Dignity, into Arabic. We spoke with Dr. Palmer about the book, his life’s work advancing liberty, and how the Middle East can benefit from a “dignity-first” approach to its ongoing development.
Dr. Palmer, why did you write this book? Can you explain the central argument of your book "Development with Dignity" in a tweet?
There are a lot of reasons to write a book, but the main one was because we wanted to change policies that demonstrably hurt many millions of people, that keep them trapped in poverty. And those policies can be changed. My colleague and co-author Matt Warner and I have spent years working in developing countries, observing and listening, as well as studying the work of anthropologists, economists, and historians who have been critical of failed orthodoxies, critics such as Polly Hill, Peter Bauer, George Ayittey, William Easterly, Olúfemi Táíwò, and Deirdre McCloskey. We wanted to apply sound economic insights to the lives of real people.
Now to the Tweet! “Development starts with dignity. People can be agents of their own futures, not subjects to be manipulated by the powerful. We all know things others don’t and market institutions provide the means to put our knowledge to work for the common good. Respecting dignity requires a presumption of liberty, to work, to trade, to innovate.”
Why do you think development interventions led by outsiders often have unintended consequences, and what can be done to prevent them?
Outsiders don’t have the knowledge that people who actually have to live with the existing or proposed institutions have. Moreover, they don’t have to live with the consequences of those institutions or with proposed changes. The outsiders, even if well-intentioned, cannot be experts about the actual lives lived by others. In economics, we talk about how good institutions, notably legally secure and transferable property rights for all that are protected by the rule of law, lead to “internalization of externalities.” That’s a technical way of saying that people bear the consequences of their actions. Outsiders don’t bear the consequences. The people who bear the consequences are generally best suited to make the decisions about their lives.
In the history of development economics, which we outline, most self-styled development experts in the 20th century thought that what was lacking in poorer countries was “capital” and that capital could be somehow imported from abroad in the form of foreign aid. That proved to be a spectacular failure, not only in material economic terms, but in terms of undermining democratically accountable governments. How can a government with a budget paid for by people in London, Paris, Washington, Tokyo, Brussels, or Geneva be accountable to its own citizens?
As the disasters of foreign aid dependency, which actually suppressed economic improvements, became evident, some turned in a more positive direction and started to ask questions about institutions. After all, how did the rich countries become rich if they had not first gotten foreign aid from some other source? And from whom? Martians? It was sound institutions that turned otherwise unpromising places into lands of prosperity. It wasn’t gold or slaves or empire or diamond mines or even fertile land that was the foundation for prosperity. The Dutch were the first to generate a middle-class and generally prosperous society and they didn’t even have land, which they had to create out of the sea, which is why they’re called the “Netherlands,” or the low lands, as so much of their land is below sea level. What they had after freeing themselves from their imperial overlords were institutions that worked well.
The turn toward institutions, however, suffered from similar problems. You can’t just export an institution like you can export a shirt or a cell phone or an onion. If institutions are not connected to the traditions and expectations of the people to whom they are exported, whether by inducements of aid or by simple force, they’re more likely to fail, as they generally have. The dignity-centric approach recognizes that people are far more likely to embrace institutions that are their own products. They may have core similarities to functioning institutions in other places, but they will be their own institutions and, thus, more likely actually to function and to realize the benefits that their analogues in wealthy countries realize.
In your book, you argue that social orders recognizing autonomy and human dignity can lead to increased prosperity. Can you provide examples of this in action? Can you steelman an opposing view?
It’s not merely that they can increase prosperity, but that they have in country after country. The economic historian Deirdre McCloskey has quite convincingly pointed to changes in moral discourse, rather than material conditions, that led to the enormous explosion of prosperity of recent centuries. It wasn’t the use of coal, or the cotton trade, or the transatlantic slave trade that caused an increase in prosperity. (Slavery had existed for millennia without generating a wealth explosion, and it persisted in other regions long after it had been abolished in those that were the pioneers in the great increase in mass prosperity. Of the people enslaved in the transatlantic horror, some 40% were forced to go to Brazil, compared to about 3% to North America. The horror of slavery did not make Brazil thirteen times more prosperous than North America; quite the opposite.) Testing such claims against the historical record, as Deirdre McCloskey does in her detailed studies, shows that the change was at base moral and not material. Innovation was, of course, central, but what made such innovation possible? It was the moral change that allowed ordinary people to engage in permissionless innovation. That isn’t by any means confined to one or another part of the world, but it is what accounts for increased prosperity everywhere.
Allow me, please, to quote from the opening paragraph of the chapter on “Dignity and Innovation.”
“Imagine a very poor country. The average life expectancy is forty- four years, sixteen years fewer than in the Democratic Republic of the Congo. Indoor plumbing is considered a luxury. More than one out of four children (28 percent) die before the age of five. Forty- three percent of ‘gainful workers ten years and older’ work just to grow food, and that doesn’t count the almost universal use of the labor of children younger than ten years of age on farms, also known as ‘chores.’ Nearly 10 percent of the working population ten years or older provide domestic and personal services for those considered wealthy by the standards of that society. No one has a cell phone, not even a radio or a television.”
That country would be about the poorest in the world today. The only ones with comparable conditions are those, such as Yemen, that are subject to horribly destructive military conflicts. And even there conditions are in some ways better than the country I describe. Well, what is that country? It’s the country my grandparents were born in in 1890. And that country was at the time one of the very richest in the world! The changes from my grandparents’ lives to mine and those of the next generation are what we call economic growth. It’s not something called “the economy” that grows; it’s the ability of people to live better lives, to enjoy longer and more commodious lives and not to see their children die in their arms. Those changes were not merely accumulations of more “capital” – more bricks and horses and windmills and the like. Electricity in place of windmills, engines in place of horses, and so on. They were innovations, new ways of solving human problems. And what made them possible? Respect for the dignity and the correlative liberty of every person to live as they choose and to use their minds to do things differently.
I was very much influenced years ago by the economic anthropologist Polly Hill, whom we cite in the book, who demonstrated just such innovations in West Africa, but which were often snuffed out by outsiders and by foreign-aid financed local kleptocracies and tyrannies. As she noted in one of her studies, “We must study the farmer, not patronize him: we must assume that he knows his business better than we do.” It’s when we patronize the farmer and presume to teach him – or sometimes, more likely, her – how to farm, that we suffocate the farmer’s ability to improve his or her life.
The key to engaging with opposing views is to take them seriously and then to examine them for internal coherence and to test their predictions against experience. Various explanations for economic prosperity can be so tested, as can the various explanations for underdevelopment. We do just that in the book. A notable example is the claim that it’s “leadership” that make countries prosperous and that autocracies have some kind of advantage over democracies. The evidence shows that there is no statistical evidence for any positive value to autocratic “leadership” or to dictatorship. Dictators love to claim credit, but they deserve very little, if any positive credit. The general track record of dictatorships is extremely dismal.
All of IBB’s programs are supported by our valued donors. To receive new posts and support our work, please consider becoming a free or paid subscriber. Paid subscriptions go directly towards funding our Innovation Hub grantees.
In the context of the Middle East, how do you believe culture, context, and local institutions play a role in ending poverty?
The question of the lagging economic performance in the MENA region has been addressed by a number of scholars, such as Professor Nouh El Harmouzi and Professor Timur Kuran. Matt and I have learned a great deal from their pioneering and influential scholarship. The MENA regimes vary in character to some extent, but there is a general tendency toward autocracy, possibly a residue of European colonialism, possibly of non-European colonialism, and possibly a residue of the dynamics studied by the great scholar Ibn Khaldun in the Muqaddimah. Whatever the source, what we find is underperformance, not by MENA peoples, but by people in the MENA region. When people from the region travel to other countries where they have better secured legal rights, they do very well, indeed. As Lant Pritchett points out, “Mostly in the world, there aren’t poor people. There are people in poor places.” The local institutions need to be addressed, but – and here’s the key – they must be addressed by local people, by the ones who will live with the consequences of reforms and who understand the local traditions, customs, and expectations on which successful institutional reforms must be based.
Can you share some examples of the importance of valuing people as self-governing agents in development interventions?
The book has a number of case studies of local solutions, but allow me to address just two, which would not have been thought of by outsiders, because outsiders can’t see the problems with which local people actually have to live. In India, the Centre for Civil Society knew what people who visit India can see, but not really understand, and that is that a huge amount of trade happens literally “on the street,” between customers and street vendors. As was explained to me by activists in India, a woman who has had a business selling garments or food or kitchen utensils on the street has worked at it for more than twenty years, yet her “store” has never grown bigger than the reach of her two arms. Why? It’s because her goods are laid out on a blanket and she has to be able to gather the four corners of the blanket to snatch up her wares and flee when the police arrive to demand bribes, to beat people, to confiscate their goods, and to humiliate them, that is, to rob them of their dignity as merchants. Activists in India advanced measures to recognize such vendors as legitimate businesses, including the 2014 Street Vendors Act and subsequent campaigns to inform vendors of their newly recognized rights and dignity. The transformation legalized many millions of businesses, with huge benefits for the vendors, for their customers, and for their suppliers. As one such entrepreneurial vendor, Dinesh Dixit, put it, “After the 2014 Act we got our rights and our voices were elevated. Now, they listen to what we have to say, and they also implement it.... Previously, I used to sell goods worth a few hundred of INR (less than $2), now I have goods in my shop worth thousands. I feel like I have become a better businessman.”
Another case, which we also document, is Burundi, where people who are motivated by the quest for dignity have made it possible for people to start businesses and to grow them, meaning better paying jobs for huge numbers of people and growing incomes for all. The result shows up in statistics on jobs and incomes, but more fundamentally in the dignity that people have to work, to trade, to innovate, and to improve their lives without having to beg for permissions from those with power.
Since the book recently came out there are more such examples from all the corners of the world.
Your book offers practical guidelines for implementing "dignity-first" development. Can you describe some of these guidelines and how they can be applied across the MENA region?
That’s a serious question for a very complex and varied region, but importantly it means abandoning the rather common Soviet-style economic policies that have plagued many countries. Military officers and autocrats lack both the incentives and the knowledge to make improvements in the lives of people. Top down “development” fails because you can’t really “develop” other people. They do best when they develop their own lives, based on their own knowledge, desires, and plans. What governments can do, but don’t generally do that well in the region, is to provide a framework of reliable law that is available to all. What they generally do, instead, is to intervene arbitrarily and capriciously into the lives of people to advance the interests of the rulers and their cronies. How to change that? Foreign intervention has a truly terrible track record and has generally entrenched autocracies and subverted democratic liberalism. It’s objectionable for so many reasons that are likely well known to your readers. The changes have to come from within the varied societies of the MENA region. One part of that is grasping and applying the ideas of dignity and “bottom up” development within the cultural contexts of the region.
Dignity is not the privileged property of one or another country or culture. It is a human experience. The Arabs know this well, for it was the horrifying humiliation and the heaping of indignities by the authorities on Mohamed Bouazizi, with whose experiences we open the book, that shocked the entire MENA region. As his sister Leila said of their town, “In Sidi Bouzid, those with no connections and no money for bribes are humiliated and insulted and not allowed to live.” His mother, one year after the terrible act that shocked the conscience of the region, said, “When he set fire to himself, it wasn’t about his scales being confiscated. It was about his dignity. Dignity before bread. Mohamed’s first concern was his dignity. Dignity before bread.”
How can NGOs, multilateral institutions, and donor countries support liberal democracy through development practice, and what role does "dignity-first" development play in this?
It means that outsiders of the sort you list should start by showing some humility. They – and I include myself and my colleagues – don’t generally know how it is to live and deal with the obstacles faced by people who are struggling in poverty. We have to learn to listen. What do they have to do to start a business, to get a job, to build a house, to introduce a product or a service. How many permits and bribes and connections are required? Who gets them and how? Our approach at Atlas Network is not to hire people to fix problems, because then they’re answering to us and not to their own communities. We work, instead, with self-governing local organizations and respond to their initiatives that are based on their unique knowledge and experience. They know the laws – both as written in legislation and as implemented, which are often very different matters – and they know the local legal, political, economic, and social circumstances within which all of those problems are embedded. We provide, not guidance or directives, but basic training in business management, fundraising, and the like, and then we invest in projects that are pitched to our institute relations team on a competitive basis. Moreover, we provide peer-to-peer learning to enable people in one country or region to learn from their peers, who are dealing with similar problems. It doesn’t generally help to have people from England or the US or Norway or Japan pretend to “teach” people in Egypt or Lebanon how to fix problems. But Lebanese and Egyptians who are solving problems in their own countries may very well have somethings to share with each other.
Your book draws on interdisciplinary perspectives to support its arguments. Could you discuss some of these perspectives and their relevance to development practice?
This book isn’t just economics, although there’s lots of economic reasoning and accessible data in the book. We start with a broader humanistic approach, which entails moral philosophy, sociology, anthropology, economics, political science, and history. Development isn’t just a technical problem to be solved by some kind of social engineers, as if people were just building materials that can be manipulated to create structures. We are moral beings, capable of choices, of planning our lives, of ambitions, of dreams. We grow up in families and we live in communities that are the outcomes of traditions and practices of long standing. Economics has to take those factors into account. Economics is one of the humane disciplines, but many have considered it instead to be a kind of engineering, in which experts manipulate materials, without considering whether those materials might have their own plans, which may run counter to the plans of the engineers. Our approach is humanistic, bottom-up, and based on the moral fact of human dignity.
What reforms to development practice do you recommend in your book, and how can they be implemented at the institutional level?
The reforms will vary from place to place, as the problems vary. In general, a core element is respect for the equal freedom of people as workers, as entrepreneurs, as savers, as investors, as property owners, and as citizens. That means removing the huge numbers of permissions that governments require, often for the most every-day and unremarkable of things. People should have the presumption of liberty to do what they think best with what is theirs; they should not have to beg for permission from others who are presumed to have the legitimate power to deny permissions. That means the freedom for everyone to engage in mutually beneficial trade with others, whether those others are across the street, across town, at the other end of the country, or in other countries. Voluntary trade generates both prosperity and peace, as well as mutual learning.
Why do you think Arabic readers would benefit from reading your book, and why?
Speakers of Arabic are heirs to great civilizations and they have every right to participate in the same material advances as others by embracing the dignity at the core of self-governance and democratic deliberation. For a variety of reasons, readers of Arabic have been negatively isolated from much of the world discussion and have been instead force-fed by various dictatorships a stale diet prepared by the disastrous European cults of Marxism, Fascism, and Nationalism. When Arabs enjoy their dignity as individuals they can flourish and can embrace the best of their own traditions, without being subjected to imported ideologies of dictatorship and violence.
Given the region's unique cultural and political context, how do you think your ideas about "dignity-first" development will be received in the Middle East?
The MENA region is quite varied in ways that outsiders rarely appreciate. I’ve interacted with scholars, merchants, policy makers, and ordinary people in many MENA countries and I see the human aspirations to improvement in their lives and those of their children that one sees everywhere. I think that the time is ripe for dignity and liberty in the Arab world. They’ve waited and suffered too long.
What do you think organizations like Ideas Beyond Borders can do to promote literacy, critical thinking, and civic engagement in the Middle East? Atlas Network?
I’m a huge fan of IBB for its work to engage thinkers everywhere. It means making cutting edge research and work by world-class scholars available in the languages of the region. That means that local people can craft their own narratives of development, of liberty, of community. Atlas Network’s work with partners everywhere – in Asia, in the Americas, in the MENA region, is founded on respect for their autonomy. We don’t direct projects. We don’t hire people to manage projects. We listen to the proposals and plans of people who know what they’re doing, who understand local contexts, and who identify real obstacles to people flourishing. They create their own plans to reduce those obstacles and to generate the local institutional infrastructure that will facilitate development, without presuming to direct that development. Just as laws should facilitate activities and should not presume to direct them, we try to facilitate changes and don’t presume to direct them.
How do you hope your book will impact development practice and human rights in the Middle East, and what message do you hope its readers will take away from it?
I am reminded of the last words of Mohamed Bouazizi before he died: “How do you expect me to make a living?” No one should ever be driven to that despair by being humiliated by the authorities. No one. People can grasp their own dignity and enjoy the freedom to improve their lives. There are lessons from other regions, but the application can only be local. Hoping for another loan from some multilateral governmental organizations or even from the good will of petro-despots is no way to grasp one’s own dignity, to forge one’s own future, and to secure for oneself and for one’s family and community futures of peace and liberty and prosperity. We hope that our book will help people to grasp their own dignity. We don’t know all the solutions and we don’t claim to know how to implement them, but we offer many examples of workable solutions and a helpful framework for understanding them and adapting them to other contexts.
Do you see your book as a part of a larger movement to promote liberalism and human rights in the Middle East, and if so, how do you think it contributes to this movement?
I’m not a political activist, so I can’t comment much on the many political movements of the MENA region. Those are political issues for local people to sort out. The value of liberalism is precisely that it doesn’t demand a one-size-fits-all approach, as do the ideologies of collectivism, all of which are derived from arrogant European ideologues, whether Marxism or Fascism or Nationalism. We’re all human beings and we all have features in common, notable among them the ability to think, to plan, and to make choices. We also all have knowledge that others don’t have, which is a key reason why collectivism fails, because it assumes that the knowledge in the mind of a dictator is somehow greater than the knowledge in the minds of their many subjects. Liberalism respects the limits of knowledge and the dignity of individuals. How can we respect the dignity and the rights of all and acknowledge the limits on the knowledge and the capabilities of central authorities? That’s what liberalism is all about.
How can local institutions and communities in the Middle East be involved in promoting "dignity-first" development?
Well, first....read our book! Of course, that’s not strictly necessary, but we hope that our book will help by providing many examples of what people in a variety of regions of the world have done successfully to implement incremental reforms that make life better. We wrote it in a way to address complicated materials in straightforward and accessible language.
Second, find or organize local groups that can address local problems. Municipal or national or regional governments often impose staggering burdens of paperwork, permissions, licenses, and taxes on people that make it extremely difficult, or even impossible, for them to do things that are easy to do in wealthier countries, not because those countries are wealthier, but because they have fewer bureaucratic obstacles. Go to the Economic Freedom of the World Report to learn more about economic freedom and its role in facilitating prosperity. Data can be found at www.freetheworld.com. And there is a wealth of material – described in English – at www.AtlasNetwork.org that describes how people are solving problems on every continent.
Being passive subjects is a recipe for stagnation, poverty, hopelessness. Being active citizens who build institutions of liberty is a recipe for development, for widespread prosperity, and for optimism and hope. We hope that our book may inspire and inform people to abandon the former and to embrace the latter.
We hope so too Dr. Palmer. Thank you for taking the time to speak with us.
All of IBB’s programs are supported by our valued donors. To receive new posts and support our work, please consider becoming a free or paid subscriber. Paid subscriptions go directly towards funding our Innovation Hub grantees.