Wednesday March 4th, 2015, 9:35 pm (EST)

Dear Reader,


A Precarious Existence: The Fate of Billions?

This essay was written as an extended reflection on Samir Amin’s “World Poverty, Pauperization, & Capital Accumulation,” in the October 2003 MR.

The Wretched of the Earth


Of the 3 billion inhabitants of cities, a recent United Nations report indicates that close to 1 billion live in slums—that number vastly expanded during the so-called boom years of the 1990s. It is estimated that over the next 50 years the number living in slums will increase by about 300 percent (The Challenge of Slums—Global Report on Human Settlements 2003, UN Human Settlements Program).

The other half of the world’s population—about 3 billion people—live in rural areas. Most of them are producing food for themselves and/or to sell to others. Many rural inhabitants live in difficult conditions, but those with access to land can usually provide food for their families.

The situation is far from static. A continuing mass migration of people from rural regions into the cities of the third world is underway. Some 20 to 30 million people leave their villages each year, swelling the ranks of urban populations. People move to the cities in response to difficult conditions in rural areas (thinking that there are better prospects in the cities) or because they are pushed off their farms when an expanding capitalist farming sector takes over land or mechanizes production.

In the core countries the migration of the peasants and farmers to the cities began as capitalism first developed in the 16th through early 19th centuries—and continued through the 20th century. As the population moved to the cities new job opportunities were being created by industrialization at the same time as increased agricultural mechanization and productivity were decreasing the need for labor to farm the land. There was also another outlet for people pushed off the land in Europe when there were not sufficient jobs in the cities. Millions of people migrated to colonies and former colonies—the United States, Canada, and Australia—where land and other resources appropriated from indigenous peoples provided, for a while, a seemingly endless frontier.

What is occurring today in the third world, beginning in the late 20th century, is something very different. It is the migration of farmers, peasants, and landless rural families to cities that do not have sufficient jobs to absorb the newcomers productively. Although some manage to migrate to the core capitalist countries, this outlet for “excess” population has been effectively closed to the masses of people. The result has been the explosive growth of slums in the third world, accompanied by misery and hungry people without access to land to grow their own food.

One of the most important human issues of our time is the future of the vast numbers of people around the world who are living by producing food and what will happen to them when forced off the land. It is also an issue that gets all too little attention from mainstream and left academics.

Why Are So Many Hungry?

It is commonly believed that hunger is confined to the periods when drought, floods, or war disrupt the normal production and distribution of food, resulting in heartbreaking famines. However, hunger and food insecurity (not knowing where your next meal is coming from) are the normal situation for a large portion of humanity. While not as visible and dramatic as famine, chronic malnutrition has disastrous results in terms of the poor physical and mental development of children, difficulty in learning, increased susceptibility to diseases, and so on. The UN estimates that about 840 million people—including 10 million in the core industrialized countries—suffered from undernourishment during the period 1999–2001. According to the UN, there has been an increase in the number of undernourished people, with about 18 million more in the period of 1999–2001 than in 1995–1997. However, many more people than the UN estimates are living under food insecurity, in various degrees of hunger—perhaps as many as 3 billion. Even if the number is “only” 840 million, it is still shocking!

While hunger certainly exists in the countryside it can be an even more challenging problem in cities. Removed from the land, people can’t grow their own food and must find some income source. When economic development doesn’t provide sufficient jobs for those forced into the cities, people try to scrape by in the “informal economy”—frequently purchasing items and reselling them in smaller quantities—or resort to crime.

There is enough food produced globally to meet the basic nutritional needs of the world’s people. The same is true within most countries. Chronic malnutrition and food insecurity are caused mainly by poverty and not by lack of food production. One has to go no further than the United States to see that hunger can exist side-by-side with an agricultural system that produces more than enough food to nourish the entire population adequately. Twelve million U.S. families are considered “food insecure” and in close to 4 million families—containing over 9 million people—someone skipped meals because of lack of food. The United States Conference of Mayors reported that “…during 2002 requests for emergency food assistance increased by an average of 19 percent, with 100 percent of the cities registering an increase” (A Status Report on Hunger and Homelessness in America’s Cities 2002, Even in my state, Vermont, with a relatively low official unemployment rate, the requests for food from various private charities have skyrocketed in recent years. Eighty percent of the new families seeking food assistance have someone that is working. The director of one of the food assistance programs commented, “I’ve seen an increasing number of parents who will say they have not eaten for a day or two to feed their children.”

The coexistence of surplus food and hunger also occurs in the third world. India is one of the success stories of the “green revolution,” where a combination of improved varieties and a number of agronomic techniques led to much greater national food production. However, India now has “excess” food at the same time that it has widespread hunger. A newspaper headline tells it all, “Poor in India Starve as Surplus Wheat Rots” (New York Times, December 12, 2002). This surplus food rots, is eaten by rats, or is exported at low prices while people in India go hungry.

In general, people are chronically hungry because they are poor and don’t have enough money to buy food. It is as simple as that! Under capitalism, food is just another commodity—like a pair of shoes, a television, or an automobile. People have no more legal right to food than they have to any other commodity.

Let Them Eat Free Trade

The answer of the governments of the core capitalist countries—as well as the various international organizations such as the IMF and World Bank—to almost all problems of development, including poverty and hunger, is a one-size-fits-all approach. Disregarding the needs and desires of a country’s people and its concrete situation, this general approach begins with eliminating tariffs and other trade barriers on goods and allowing the free movement of capital into and out of countries.

The neoliberal theory goes as follows. The removal of barriers to the flow of goods and capital permits a country to concentrate on developing the areas in which it has a “comparative advantage.” That is to say, the country should focus on mining, growing, or manufacturing the products for which it has an advantage due to climate, natural resources, a skilled labor force or other factors. Then it can purchase whatever else it needs with the currency earned by exporting these products. In addition, the theory goes, these steps overcome one of the main hindrances to development of the countries of the periphery—a lack of investment capital to build factories, communication systems, roads, and ports. It follows, according to the neoliberal logic, that making conditions more attractive to foreign corporations (for example, by allowing them to repatriate all of their profits) means that they will invest more, leading to greater economic development and prosperity. Markets for goods and capital, freed of government control, will work in ways that magically create optimum conditions for all—a win-win situation with no losers!

There are many problems with the neoliberal market-oriented “free trade” approach, which I will not go into here. However, one in particular has haunted countries in the periphery for a long time, even before the recent push for them to open up completely to foreign capital. The very process of investing capital from the core in the periphery tends to generate debt and currency crises—caused by excessive borrowing by the periphery countries as well as the repatriation of profits on invested capital to the countries of the center. Many countries are continually short of sufficient foreign currency to escape their predicament. This causes them to stimulate export-oriented industries and agriculture in order to earn foreign currency to pay off loans or allow the movement of capital out of the country. Government programs stimulate the growth of crops with export potential, such as oranges, cotton, soybeans, specialty vegetables, tropical fruits, and coffee because of their potential to earn hard currencies.

Another part of the neoliberal approach, encouraged or mandated by the IMF and World Bank, is to decrease government budgets. This is usually accomplished by eliminating subsidies that help the poor, such as those for fertilizers and food, and by privatizing various governmental functions.

Rarely mentioned, of course, is the fact that the wealthy capitalist countries developed by protecting industries and only later—as their economies strengthened and capitalists required greater access to other markets and resources—called for less restrictive trade with other countries. Also rarely discussed is the fact that U.S. agriculture developed with massive government involvement—beginning with capturing land from native peoples and transferring it to European immigrants, and going on to develop transportation infrastructure, irrigation, research, extension, subsidies for farmers, export incentives, and so on. Not the least concerned with the hypocrisy of the situation, governments of the wealthy capitalist core continue to use a variety of means to protect and favor the businesses of their countries while espousing free trade and free markets.

The Devastating Results

Following the standard prescription—opening up countries of the periphery to the free flow of goods, services, and capital as well as decreasing government support programs that help the living conditions of the poor—can be devastating. There are numerous recent examples of how such policies have hurt the poor. Taking the advice of the World Bank and various aid organizations, the government of Malawi reduced assistance to agriculture and at the same time let its currency float. This led to a devaluation of their currency and a five-fold increase in the cost of imported fertilizer—putting this essential ingredient of agriculture out of the reach of most farmers (New York Times, July 13, 2003). The use of fertilizers is one of the keys to enhanced agricultural production on the ancient and nutrient depleted soils of Africa. Even though aid agencies have helped some farmers obtain modest amounts of fertilizer, the market-oriented “solutions” recommended by experts have led to widespread and more persistent hunger, even when the climate is favorable. In Ghana, the government, “pressured by its Western creditors to keep its fiscal house in order, doesn’t supply fertilizer subsidies, crop-price supports, or any other equivalent of cheap financing…” (Wall Street Journal December 3, 2002). With the relatively high prices of fertilizers, which need to be imported, a lack of subsidies means that farmers use little or no fertilizer, thus food production and opportunities for earning extra income are well below easily attainable levels.

The effects of the transition to “free markets,” “free trade,” and decreased government support for food production have been even more damaging to Ethiopia. The government, heeding aid organizations that advised a “free market” approach with decreased government “interference,” decided that after they had stimulated agricultural production they needed to reduce the state’s assistance for agriculture. Better seeds and easier access to fertilizers were made available to farmers and production increased. As prices received by farmers fell dramatically in response to a glut on the market, there were few storage facilities to allow farmers to store grains and wait for prices to rise. Funds were not available for those wishing to build grain storage structures. Farmers responded in a completely logical way to record low prices in 2001. They reduced the amount of land they planted the following year. This decrease in planted area, together with unfavorable weather in 2002, created conditions for widespread hunger and even starvation in 2003.

Following the Philippine government’s embrace of neoliberal policies—with the alignment of tariffs and laws to accommodate requirements of the World Trade Organization (WTO)—the situation of farmers and agriculture in the Philippines took a sharp turn for the worse. Imports of rice and corn surged, as many had anticipated, creating widespread misery among farmers. It was expected that farmers would switch to more lucrative crops for export. However, Philippine agriculture was weak, not only in comparison to the highly subsidized U.S. farms, but also relative to the agriculture of China, Taiwan, Thailand, and Vietnam. Philippine farmers had been encouraged to produce vegetables, poultry, and beef for profitable export, but they could not compete internationally, so that even their domestic markets have been swamped by imports.

Laura Carlsen, an analyst with the Americas Program of the Interhemispheric Resource Center (IRC), in a June 2003 speech before the Committee on Industry, External Trade, Research, and Energy of the European Parliament, explained what has happened in Mexico, one of the early participants in the rush to liberalize trade relations:

In sum, two decades of agricultural trade liberalization in Mexico have led to: an increase in rural poverty, malnutrition, out-migration, and instability; increased workloads, particularly for women; increased consumer prices; increased profits and market control by transnational traders and processors at the cost of smallholder farmers; lost national revenues that could have been applied to development programs; and severe risks to the environment and biodiversity. (www.americaspolicy .org/commentary/2003/0306eu_body.html)

The harsh effects of the North America Free Trade Area (NAFTA) on people living in the Mexican countryside are partially offset by migration to the United States and by remittances that immigrants send to families back home. There is a long history of migration from Mexico, with the bulk of immigrants coming from states with poor soils and a tradition of immigration. However, many in the new wave of Mexicans coming to the United States in response to the effects of NAFTA are leaving regions with good soils and productive agriculture.

The situation that has occurred with coffee—once a crop that provided modest but reasonably dependable income for many small farmers—should be a caution to those championing export-oriented production. Coffee is a crop that employs some 25 million people, many working on relatively small farms. However, over a relatively short period of time, both Vietnam (once a minor player in the international coffee market, but now accounting for about 12 percent of the total world exports of coffee) and Brazil greatly increased their coffee plantings in hopes of taking advantage of this “high value” crop. Because production has gotten so far ahead of demand, the prices received by farmers have plummeted by around 50 percent, creating a disaster for the world’s coffee growers. This price drop has, of course, created significant corporate profit opportunities, for prices of finished agricultural products rarely decline much when there’s a glut of raw material on the market.

The WTO and Cancun: A Challenge to the Center

It isn’t surprising that so many countries in the periphery initially bought into the supposed advantages of free trade and reduced governmental budgets, and participated in the rush to join the WTO and to adjust national laws and tariffs to fit the new “free trade” paradigm. The finance and trade officials of many third world countries were trained in the United States and Europe in what has become the orthodox theory of growth and development. However, some government leaders and many popular organizations in the periphery are having second thoughts about the purpose and outcomes of the so-called globalization that is taking place under the orchestration of giant corporations and governments of the capitalist center. A struggle over the rules governing international trade is underway, with many leaders in the periphery concerned about the effects of new arrangements on their people. While not questioning the basic assumptions, some are beginning to question whether “free trade” is really so free.

Before the September 2003 Cancun WTO meeting, the presidents of Mali and Burkina Faso, Amadou Toumani Touré and Blaise Compaoré, complained about the high subsidies of U.S. agricultural products (New York Times, July 11, 2003). They claimed that the subsidies on crops in the core countries result in overproduction and artificially low prices on the world market, making it difficult for countries in the periphery to earn foreign exchange by selling the agricultural commodities they produce. Essentially, the two presidents were asking the United States to live up to its own free trade rhetoric.

It is estimated that the average U.S. farmer receives an annual subsidy of over $20,000 while the average Mexican farmer receives about $700 (Business Week, November 18, 2002). As Presidents Touré and Compaoré pointed out in their article, “America’s 25,000 cotton farmers received more in subsidies—some $3 billion—than the entire economic output of Burkina Faso, where two million people depend on cotton.” Not mentioned by the two presidents was another subsidy—about $1.7 billion a year goes to U.S. companies that purchase domestically grown cotton. Subsidies to U.S. corn farmers without any system of supply management, stimulating production and allowing the crop to be sold under the cost of production, plus aggressive marketing by transnational corporations, harms Mexican and Filipino farmers. European protection for its sugar beet farmers and U.S. sugar quotas hurt sugar cane producers in Africa and Latin America.

The Cancun meeting of WTO ministers ended in failure because an important group of countries in the periphery began to understand that the rules of the game—developed and favored by the wealthy superpowers—have been rigged against them. The Group of 20 (the number varies some), under the leadership of Brazil and India, refused to accept some of the rules developed by the capitalist core countries that leave them in an especially vulnerable position.

Many nongovernmental organizations in the periphery are also demanding change. Mexico has had 10 years of experience with “free trade,” including farming high value crops in the northern states, losing a huge number of farmers in the process and leaving many rural areas devastated. In January 2003, some 100,000 people took to the streets demanding renegotiation of NAFTA. They also demonstrated in favor of a national rural development pact and commitment to food sovereignty.

False Hopes about Subsidies

The breakup of the Cancun WTO meeting may prove to be an important turning point in the relations between the periphery and core countries, making it more difficult for transnational corporations to set the entire international trade agenda. However, the emphasis of the Group of 20 on subsidies to farmers in the core countries as the major stumbling block to greater prosperity for farmers in the periphery may be misplaced. There are two reasons that eliminating the subsidies and allowing free markets to operate might not have the imagined positive effects on the periphery. First, farmers don’t necessarily behave as economist’s models predict. Second, there are other issues that are probably more important than the subsidies.

It is believed that if subsidies were eliminated, in effect reducing the revenues farmers receive, U.S. farmers would decrease production by planting less land or by switching to other more lucrative crops. However, this scenario bears little relation to what really happens in the short to medium run. A conversation I witnessed in the late 1990s helps to illustrate the point. While meeting with five dairy farmers in his office, the chief economist of the U.S. Department of Agriculture was astonished to hear one farmer explain that as milk prices declined he added more cows to his herd and when prices went up, he would sell a few. This is exactly the opposite of what conventional economic theory would predict. When asked why, the farmer explained that when prices decreased he had to produce more milk to meet his fixed costs (such as property taxes and building maintenance). As prices increased, he would sell a few cows (instead of adding more, as theory holds) to make his life easier. The decision made by each farmer—increasing production in response to falling prices—makes absolute economic sense for the individual, even though when many do the same it harms them all by stimulating overproduction and lowering prices even more.

In addition to the general tendency of farmers to produce more as prices decrease, there are other obstacles to the ideal behavior pictured by conventional economists. For example, because many crops require specialized machinery and different management than the farmer currently uses, it is not always easy to switch rapidly from one crop to another. In addition, farmers frequently manage to produce for quite a few years while receiving less than the cost of production by deferring maintenance and taking out more loans. Finally, farmers never know what the weather will be on their farm or in other places around the world where a particular crop is grown. Low prices in one year, because of a glut on the market, may be followed by higher prices the next year as yields decline because of poor growing conditions in a major growing region.

It is also possible that the elimination of subsidies would speed the concentration of U.S. farms into large production units, with relatively low average costs of production. For example, farms with greater than 1,500 acres of cotton have lower costs of production per pound of lint than the smaller farms that tend not to specialize in cotton production. The same general pattern holds true for corn and soybean farms.

Experiences with the removal of subsidies and/or low agricultural commodity prices in Australia, Canada, and Mexico indicate that the total amount of cropland may well stay the same or increase. Farmers sometimes change their mix of crops in response to the removal of subsidies or because of low prices for one crop, but frequently they do not. (The behavior of Ethiopian farmers, decreasing the cropland they plant following a year of prices disastrously below their costs of production, is different from farmers in the United States, Canada, or Australia who are able to withstand a year or two of low prices.)

Despite disadvantages, some farmers in the periphery, such as soybean growers in Brazil, are already competing successfully on the uneven playing field of international agricultural markets. Many more would be able to compete in a hypothetical free (and unsubsidized) market. But they will quickly find that in order to succeed they need to “modernize” their farms. This involves a number of techniques—a high degree of mechanization, use of the newest varieties, and extensive reliance on fertilizers and pesticides, frequently available only as imported products. Some countries in the periphery, such as Brazil, have considered large-scale, export-oriented, agriculture progressive because it is efficient in terms of labor and at the same time helps to generate the foreign currency that is desperately needed to dig their countries out of debt peonage. However, there is extensive documentation of the environmental harm caused by excess use or misuse of pesticides and fertilizers.

The mechanization of agricultural production, as a strategy to help farmers in the periphery compete internationally, may actually pose the greatest threat to the food supply of people in the third world. As I have pointed out previously, while mechanization of agriculture does increase labor productivity it does not necessarily result in higher amounts of food produced per hectare or acre (Fred Magdoff, “Pros and Cons of Agricultural Mechanization in the Third World,” Monthly Review, May 1982, 33–45.). In addition, when mechanization occurs without the availability of work in the other sectors, unemployment and hunger are the normal results. Although conditions in the countryside may be harsh, having some land on which to grow food provides a degree of protection against hunger. Samir Amin has estimated that 20 million large scale and highly mechanized capitalist farmers could produce all the food needed in the world. Yet, there is no realistic possibility that anywhere near the sufficient number of jobs will appear to provide employment to the mass of humanity displaced by advanced capitalist agriculture, wherever those large farms are located. What will be the fate of those “unneeded” billions of people if that actually happens?

What Are the Critical Obstacles?

Lost in the discussion of subsidies to farmers in the wealthy capitalist core countries are other more important issues undermining agriculture and the conditions of the poor in the periphery. For example, competition among the countries of the periphery under truly free trade is as much a potential threat to their agriculture and farmers as subsidies to farmers in the United States and Europe. Decisions to increase coffee production in Brazil and Vietnam are having severe repercussions for coffee growers in Latin America, Africa, and Asia. Eager to reduce its crop stockpiles, India has exported rice at very low prices, adversely affecting farmers in other countries. Imports of “high value” crops from China, Taiwan, Thailand, and Vietnam have undermined the position of Philippine farmers.

The drive to privatize state-owned agribusiness infrastructure and reduce government budgets is also part of the problem, not the solution. Privatizing state cotton enterprises in Africa—which sold inputs to farmers, purchased their crops, ginned the cotton, and pressed cottonseed to make cooking oil—created its own problem. A large portion of the African cottonseed crop is now exported to Europe for use as an animal feed, leaving the cotton oil factories running at 25 to 30 percent of capacity. As discussed above, government subsidies for fertilizers have been reduced or eliminated in a number of African countries, reducing food production and rural income. The Noble Peace Prize-winning agronomist Norman Borlaug has worked in Africa for a number of years, showing that simple techniques can increase yields on the lands of small farmers. However, he is frustrated by the lack of government programs to implement and maintain a support system for farmers. “I’m a biologist, not an economist, but even I can see [Western and African] policies aren’t working. It’s time to face up to reality” (Wall Street Journal, December 3, 2002).

Perhaps the greatest threat to farmers in the periphery is the growing corporate control over the world’s food supply. The agriculture of the periphery is under assault by the forces representing agribusiness in the countries of the center—grain trading corporations, input suppliers (especially seed and chemical companies, which are now intertwined), processors, and distributors. The attack has been carried out under the guise of promoting “free markets” and “free trade.” The real profits in agriculture are not made by growing commodities such as wheat, corn, rice, cotton, or apples. The profits of capital are generated by agribusiness at both sides (before and after) of farming. At the beginning of the 20th century, about 40 percent of the value of food purchases in the United States went to farmers; by the end of the century they received only 10 percent. The remaining money went to input suppliers (25 percent) and transportation, processing, and marketing (65 percent). Agribusiness transnationals are already well established in the periphery. For example, the giant Cargill Corporation operates in 18 Brazilian states, and has more than 120 units including its plants, warehouses, offices, port terminals, and farms. It is a major exporter and processor of soybeans (originating seven million tons annually), has one of the largest citrus processing plants in the country, and has an exclusive port terminal in Guarujá—the only automated port terminal in Brazil, for shipment of sugar products, in bulk or bags.

Is There a Way Out?

The world is traveling toward greater economic integration under rules almost exclusively favorable to large corporations in the core capitalist countries. If things continue along this path, and industrialized agriculture—now dominating U.S. agriculture—is implemented in the rest of the world, the conditions of the world’s people will certainly deteriorate. Although he has no real solution to the problem, former president of the Philippines, Fidel Ramos, once an advocate and participant in the rush to join the WTO, now expresses the concern of growing numbers of people over the clearly rigged game. “Poor countries cannot afford to be on the short end of this deal for long,” he said. “People are in real need. People are dying” (New York Times, July 21, 2003).

Erasing poverty is necessary to eliminate the abysmal conditions—including hunger—under which so many people live. Antipoverty programs, now fashionable among national and international organizations, go under the assumption that if the system could just be modified it could fully include the so-called marginalized masses. If only we could have enough charity, food pantries and soup kitchens could provide food to the hungry. If only we could provide microloans to allow people to start businesses and lift themselves out of poverty. If only we could subsidize our farmers so that they could use more fertilizer to increase food production. However, the very workings of capitalism create both a core group of wealthy nations and a periphery of very poor and moderately poor countries. It also produces a class structure that always has a lower working class—a mass of workers that alternate between employment and unemployment or are nearly permanently unemployed. These people at the “margins” of economic activity are as central to capitalism as the capitalist, factory worker, or government functionary helping to keep the system operating.

It is not possible to write a simple prescription for improving food production and alleviating hunger and misery that is valid for all countries. There are just too many differences in history, culture, and natural and human resources. However, it is clear that signing agreements that favor the wealthy nations, trying to make a country more “attractive” to capital investment, and embracing technological fixes such as genetically modified crops are not the way out. These approaches in many cases actually make things worse! Countries may also need to forgo assistance from various development agencies and organizations that tie their aid to damaging government policies. As a top official in Ghana’s Ministry of Food and Agriculture put it, “With the mere mention by us of subsidies, our development partners start howling, and want to catch us and chew us up” (Wall Street Journal, December 2, 2002). With “development partners” like that, who needs enemies?

Are there any ways for the countries of the periphery to get out of this devastating situation? There are some general approaches that should be considered. Trade arrangements that are better than those originally developed before many understood the implications of the “free trade” agreements can certainly help protect farmers and the poor in the periphery. But better “free trade” deals are no solution to these issues. Although out of fashion these days, governments in the periphery need to take an active role in assisting the transformation of their agriculture—not only to use environmentally sound production techniques, but also to be able to support large numbers of farmers. Until sufficient numbers of jobs are available in the cities, keeping people productively employed on the land as well as subsidizing the production of at least the basic foods may be prerequisites to alleviating poverty and hunger in the periphery. This may require many initiatives, such as meaningful support for ecologically sound and productive farming practices and better transportation and storage facilities. Land reform is desperately needed in many countries of Latin America and Africa. It also makes no ecological sense to have a world with food transported thousands of miles when it could have been produced close to where it is needed. Agricultural efforts should concentrate on food production for consumption within the country. On this, there is much that can be learned from the Cuban experience following the disintegration of the Soviet Union. It has led the way in the extensive development of urban agriculture (and also organic agricultural practices), where the raising of crops in cities contributes significantly to the well-being of the people.

It is, of course, not an issue of whether to trade or not, but rather to trade on terms that will help the mass of the people and encourage development. It is also not a question of whether or not to borrow money or seek technologies that may only be available abroad. However, it is important for countries to control the direction of investment—how much money will be borrowed for what uses (and under what terms). Technologies should be selected that do the most economic good while minimizing potential environmental problems. Enhancing the well-being of a country’s poor depends on development based primarily on the nation’s own human and natural resources and directed in a way to benefit its people—even though in most cases this will go against the wishes of international capital.