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M A Y 1 9 9 7
As a longtime reader of The Atlantic Monthly, I was startled to read George Soros's "The Capitalist Threat" (February Atlantic). Soros's most surprising error is his reference to the economist Friedrich Hayek. Soros cites Hayek as an advocate of laissez-faire and then goes on to reject laissez-faire economics on the grounds that it is a dogmatic system at once claiming and demanding perfect knowledge and equilibrium. Of course, Hayek's major contribution to economics was his critique of scientific assumptions in equilibrium-based economics. In a nutshell, Hayek argues that the market process relies on contextual, personal knowledge to coordinate the activities of millions of individual participants -- a vaguely Popperian notion. Soros misses Hayek's crucial point, and wastes another several hundred words sacking the scarecrow version of capitalism he has constructed.
George Soros is right to criticize classical economics, but he is wrong to criticize capitalism. It is hard to believe that he has actually read Hayek, who found the same flaws in conventional economics that Soros does, but spent his life showing that capitalism was the best way to the open society Soros claims to champion.
The virtues of openness, humility, and a willingness to admit that we do not have all the answers are not antithetical to capitalism but an integral part of it. Hayek and other economists of the Austrian School have shown that economic exchange is fundamentally a process of knowledge discovery. Permitting this process to flourish requires an admission that knowledge of resource distribution in society is fragmented, chaotic, and often unattainable. Soros's capitalism is a poorly constructed straw man.
Colorado Springs, Colo.
George Soros understands very well why Karl Popper places the open society between the extremes of fascism and communism. He unfortunately fails his mentor by effectively defining the post-Second World War open society in the United States and Europe as a capitalist free-for-all that up to 1989 was kept in check by the Cold War balance of power. Now Soros increasingly fears that unabashed selfishness will rob the West of the advantages it has enjoyed.
The trials and tribulations of the former Eastern bloc are in fact no threat to the open society. Nations like Hungary, Albania, and Romania must learn that the struggle between social cohesion and individualism is not a zero-sum game. The viability of the open society depends on the balance between minimum state control and minimum personal constraints. The pragmatist Popper understood the need for the state to selectively and properly intervene where capitalism and individualism had gone astray, and to put in place those safeguards that would protect society from such abuses.
If Soros worries about the open society, it is those social safeguards that he should turn his attention to.
George Soros replies:
I have to admit that my reference to Friedrich Hayek was misleading. My assertion that Hayek, one of the apostles of laissez-faire, was also a passionate proponent of the open society is, strictly speaking, true; but the context in which I made it implied that Hayek shared the prevailing view that markets are perfect, and that is false. Hayek criticized economic theory on the very same grounds as I do: participants act on the basis of imperfect understanding, not perfect knowledge.
Faced with imperfections in both markets and regulations, Hayek opted for letting the markets have their way, because errors would result in financial losses and so would tend to be corrected. I agree with Hayek on the merits of markets as error-correcting mechanisms, but I contend that markets have other deficiencies to which Hayek failed to give proper weight. Financial markets are inherently unstable; left to their own devices, they are liable to break down. More important, many social values are not properly represented by market forces. This defect has become more pronounced since Hayek's time by the conversion of the professions and social services into businesses.
Gregg Easterbrook's profile of the Nobel Peace Prize laureate Norman Borlaug, "Forgotten Benefactor of Humanity" (January Atlantic), is less a paean to Borlaug than a major hatchet job on those who oppose his solution to hunger and malnutrition.
Although Easterbrook fails to name explicitly a single one of Borlaug's opponents, the Institute for Food and Development Policy (Food First) has no problem placing itself among that group. To claim that merely because we disagree with Borlaug, those of us who oppose Green Revolution technologies are a bunch of effete, insensitive northern elites who do not give a damn about human suffering in Asia, Africa, and Latin America is character assassination by innuendo.
A great many of Borlaug's opponents have as many years experience living and working in Africa, Asia, and Latin America as he does. And most of us care every bit as much as Borlaug does about the unnecessary human suffering in those parts of the world, as well as in North America and Europe. But we have reached a different set of conclusions about the causes of hunger and therefore about appropriate solutions for solving the problem. Borlaug's analysis and Easterbrook's representation of the debate contain a number of fundamental flaws.
First, as Food First has always argued, hunger is not caused by food shortages or population growth rates. If that were the case, then the food increases Easterbrook erroneously attributes almost solely to the genius of one American man should have ended the problems of hunger and malnutrition in India, Pakistan, and Mexico, where Borlaug claims such success. The fundamental cause of the hunger has always involved the distribution of existing food supplies.
Second, Borlaug and Easterbrook are dead wrong to claim that environmentalists oppose increasing food-crop yields. The real debate is about identifying those methods that are safest for farmers, farm workers, consumers, and the environment.
Another irony, left unnoted in the article, is the documented fact that Green Revolution technologies lead to declining crop yields after prolonged use, in addition to damaging the environment and human health.
Third, the article gives an incomplete picture of the World Bank's "withdrawal" from food production in Africa. The World Bank and the U.S. government currently advocate the export of Green Revolution technologies to Africa together with free-trade policies and food imports. The World Bank and the U.S. government are trying to convince African countries that their comparative advantages lie not in staple food production but in such areas as cut flowers and specialty vegetables -- crops requiring vast amounts of chemical fertilizer and extensive irrigation. Is Easterbrook completely unaware, for example, of the growing economic importance of these crops in Africa and the horrendous environmental consequences due to a reliance on chemical fertilizers, pesticides, and irrigation systems?
Deborah L. Toler
Peter R. Rosset
Gregg Easterbrook marred an otherwise good piece of journalism with his gratuitous and erroneous attacks on environmentalists for limiting the use of inorganic fertilizers in sub-Saharan Africa.
In 1990, at Norman Borlaug's request, I led a mission to review his program in Ghana, where fertilizer consumption is very low. The mission's conclusions were that the costs of importing, transporting, distributing, and marketing fertilizer made it too expensive to be used by the many thousands of small farmers growing food, even though it could raise yields substantially. There is an urgent need to promote technological change in food production in sub-Saharan Africa, where most small-scale farmers are understandably risk-averse and operate in areas of erratic rainfall and weak infrastructure. The promotion of change may require some subsidization of fertilizer use as part of a broader package of sustainable soil, water, and pest-management technologies. Many environmentalists would welcome such an approach, not only because it would help small farmers to increase food production but also because it would ease pressure to expand production into fragile areas unsuited to it.
World Wildlife Fund
I take exception to Gregg Easterbrook's assertion that the World Bank was pressured by environmentalists to avoid introducing high-yield farming techniques to Africa. In fact the bank has invested $2 billion in African agriculture over the past five years. We are deeply concerned that fertilizer use in Africa is so low, and are continuing to work on the supply problems that make it particularly expensive for African farmers. The bank believes that the introduction of high-yield techniques must go forward hand in hand with broad-based rural development to provide access to markets, education, and other income-generating initiatives to help farmers move toward sustainable agriculture.
As part of this rural development agenda, we agree that much greater attention needs to be given to soil-fertility management, making maximum use of on-farm organic sources as well as inorganic fertilizer. Indeed, the fertilizer Borlaug is promoting in Ethiopia (diammonium phosphate), which Easterbrook describes as a "key reform," is being financed by the bank under the National Fertilizer Project, for which the bank is providing $120 million over five years, most of it to buy fertilizer. The bank is also collaborating with the Sasakawa Africa Association and the Carter Center (SG-2000):bank staffers serve on the council of agricultural experts that advises SG-2000; bank and SG-2000 staff have participated together in numerous conferences and workshops, and have shared knowledge and resources in their efforts to develop agriculture in Africa. The bank believes that all these efforts must be carried out in the context of revitalizing broad-based rural development, and is committing its resources to such a program.
The World Bank
Just to set the record straight, the Rockefeller Foundation continues its commitment to raising the yields and incomes of smallholder farmers in Asia and Africa; we believe that fertilizer is essential to that task and that its use is consistent with sound environmental preservation.
The agricultural sciences program has the largest budget among foundation divisions, and over the past ten years has spent about 40 percent of that budget on African smallholder agriculture, concentrating our efforts in Uganda, Kenya, Malawi, and Zimbabwe. Much of that support is directed at enabling African agricultural scientists to learn the high-yield agricultural approaches that are needed to enable Africa to feed itself -- the approaches that Norman Borlaug has used successfully.
Robert W. Herdt
The Rockefeller Foundation
New York, N.Y.
Gregg Easterbrook replies:
Deborah Toler and Peter Rosset make some good points, but they also provide an instructive sampler of the sorts of shaky reasoning employed by those who oppose extending to Africa the benefits that high-yield agriculture has brought to the world's affluent nations.
For one, they are hypersensitive. Nothing in the article describes Borlaug's opponents as "effete, insensitive northern elites who do not give a damn about human suffering." The closest to this is a statement from Borlaug -- a quotation, not an assertion by me -- that some of his opponents are "elitists" who conveniently live in the United States, where food is overabundant.
Another problem with Toler and Rosset's reasoning is their contention that "Green Revolution technologies lead to declining crop yields after prolonged use." This is a pseudo-statistic beloved of opponents to technical agriculture. The rate of increase in yield has begun declining for some Green Revolution crops, which may be worrisome enough; but the probable cause is farmers' cutting back on the application of chemicals, which environmentalists ought to favor. Most midwestern acres, where high-yield has been used longest, continue to produce more food and fiber each year.
Since when does a responsible reviewer review a chapter of a book and claim he's done his job? In "Whatever Happened to Integration?" (February Atlantic), Gerald Early reviews the second chapter of my book The Trouble With Friendship. He leaves the impression that my subject is the depiction of race relationships in movies and chides me for omitting items that deserve to be in such a work. But in fact only one of my twelve chapters deals with movies. The rest are about America as a caste society, differences of outlook between middle- class and bottom-class blacks, the trial of a welfare mother, the writings of Shelby Steele, and several related matters. Like professing and editing, reviewing is an honorable profession when practiced honorably. "Whatever Happened to Integration?" is dishonorable work.
Gerald Early replies:
One of the pivotal ideas in Benjamin DeMott's book is that capitalist, democratic culture and its finest creation, popular culture, are both sentimental and deluding, thus making an understanding of history and politics impossible. I deal with this idea because I see it as fundamental to his book and because aspects of this idea have engaged a great deal of my writing and thinking. How is it "dishonorable" for me vigorously to examine how Mr. DeMott uses it in his book? I have a right as a reviewer to focus on the elements of a book regarding which my critical abilities can be of help to the reader -- and, I dare say, the writer as well. Mr. DeMott had no substantive counterargument to my critique of his own basic argument about culture; thus, I feel that I did my job fairly and competently as a reviewer. He may be unhappy with what I said, but I addressed with some scholarly breadth what he put forth as a fundamental view in his book.
Copyright © 1997 by The Atlantic Monthly Company. All rights reserved.
The Atlantic Monthly; March 1997; Letters; Volume 279, No. 5; pages 10-14.