Finance for children

Ron Lieber of the New York Times reported recently that in the wake of the latest financial disaster,

a number of people and organizations have taken up the cause of helping the next generation of grown-ups form better habits at an earlier age.

The examples given include a series of Sesame Street lessons with Elmo representing the child’s point of view. Sometimes Cookie Monster joins in, representing the issue of lack of impulse control. For example, at one point, instead of buying cookies with a dollar gift, he can’t wait and eats the dollar.

Although these and other lessons described in the Times are designed for children, about children learning to think about money matters and also learning about themselves, this incident with Cookie Monster represents perfectly to me the kleptocracies in charge of the poorest countries, especially those who steal more from their country than it receives in foreign aid. (Kleptocracy mean government by thieves, the kleptocrats.)

This is by no means a new idea. Adam Smith described it in 1776, in his book on The Wealth of Nations.

Everything for ourselves, and nothing for other people, seems, in every age of the world, to be the vile maxim of the masters of mankind.

The most thorough student of these matters is Thorstein Veblen, author of The Theory of the Leisure Class, and the source of the phrase Conspicuous Consumption. An essential part of his analysis is that is not enough for the rich to be rich. They are driven to be richer than anybody else, and to make sure that you know it. Then they claim to be smarter and more moral than the rest of us on account of having made (or inherited, or stolen) tons of money. Conversely, the rest of usĀ  are stupid, lazy, immoral chumps for not being rich, and in particular do not deserve any form of help or aid from the government, so the rich should not be taxed to help the non-rich.

In the poorest countries, then, the problem is not only that the kleptocrats steal the country blind, but that they regard it is their moral right to do so. A combination of the Law of the Jungle with Ayn Rand, you could say.

In order to help the poorest countries, then, we must not give money that can be stolen. We have to give something that cannot be sold, and the profit stolen. Something that is effective in development, too, otherwise why bother? Can you see where I am going with this? Laptops, Free Software, and Open Education Resources, of course. Including OERs teaching how to cope with and eventually prevent government corruption and private kleptocracy. Along with Internet connections and local electricity generation systems, and microfinance.

The education initiatives described in the Times article do not directly address the problem of asset bubbles, like the Clinton Dot-Com bubble and the Bush Housing Bubble, or any of the others in the historical record, such as Dutch Tulip Mania or the South Sea Bubble. That would require that grownups learn these lessons now being taught in kindergarten.

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About mokurai

Generalist; End poverty at a profit for all
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