The death of Peter Bauer cannot pass unmarked. He was one of those people to whom we all owe a great debt, whether we realize it or not. He insisted on talking sense, even when dangerous nonsense was at the height of its popularity.
In the last two decades of his life, he was Lord Peter Bauer, courtesy of British Prime Minister Margaret Thatcher. For most of his career, however, he was Professor Peter Bauer of the London School of Economics. His specialty was the economics of under-developed countries.
The dominant orthodoxy in development economics was that Third World countries were trapped in a vicious cycle of poverty that could be broken only by massive foreign aid from the more prosperous industrial nations of the world. This was in keeping with a more general vision on the left that people were essentially divided into three categories -- the heartless, the helpless, and wonderful people like themselves, who would rescue the helpless by playing Lady Bountiful with the taxpayers' money.
Peter Bauer never bought any part of that vision. He had too much respect for people in the Third World, where he had lived for years, to think of them as helpless. "Before 1886," he pointed out, "there was not one cocoa tree in British West Africa. By the 1930s, there were millions of acres under cocoa there, all owned and operated by Africans." He rejected "condescension toward the ordinary people" of the Third World and "the classification of groups as helpless."
Third World people were just as capable of responding to the incentives of a market economy as anyone else, according to Professor Bauer, despite development economists like Gunnar Myrdal who depicted them as needing government planning imposed on them to get ahead. Development economists' hostility to the market and "contempt for ordinary people" were to Bauer "only two sides of the same coin."
If poverty was a trap from which there was no escape, Bauer declared, we would all still be living in the Stone Age, since all countries were once as poor as Third World nations are today.
Peter Bauer considered it arbitrary and self-serving to call international transfers of money to Third World governments "foreign aid." Whether it was an aid or a hindrance was an empirical question. Sometimes it could turn out to be simply "transferring money from poor people in rich countries to rich people in poor countries."