Quite a bit has happened since my last post two months ago. I've continued to wrestle with the question from my last post (why is America so much richer than Congo?), I had the pleasure of taking a few trips to Kalemie and Bujumbura, and I started a new job teaching English.
Part I: Why is America so rich while Congo is so poor?
In my last post, I wrote about a book called Why Nations Fail: The Origins of Power, Prosperity, and Poverty. Based on 15 years of research, the authors argue that wealth and inequality are mostly created by political institutions and the types of economic policies that they impose. Countries like the US with inclusive political and economic institutions tend to do better economically compared to countries like Congo with extractive institutions. The book is full of world history and gives an interesting perspective about how we have reached this current state.
This quote from a review of the book summarizes the idea effectively:
"The basic framework of the book is to lay out the relationship between economic institutions and political institutions. Some countries (Canada, Denmark, Japan) have "inclusive" political institutions and consequently develop "inclusive" economic institutions. When your economic institutions are inclusive, everyone gets a chance to go to school and learn, everyone has a chance to switch jobs or start a new business, and everyone has the opportunity to save and invest. But where countries have "extractive" political institutions they end up with "extractive" economic institutions. The president's wife's brother's son gets an exclusive license to import exercise machines (mostly used in hotel gyms since local people are too poor to use them) and earns a nice living do so free from competition. Eventually some eager beaver comes along and says, hey if this other guy is earning monopoly rents importing exercise machines then I'll just build some here domestically. But the eager beaver is naive. The exclusive import license isn't a coincidence, it reflects the president's wife's brother's son's privileged position in the political system. Smart hoteliers will know better than to buy from a competitor since it will only buy them regulatory trouble. Smart bankers will know that the new business is doomed and won't lend him money and even if it weren't doomed, lending him money would only buy them regulatory trouble. Eventually, the eager beaver's savvier wife will explain to him why the plan is doomed. Absent opportunity, human and physical capital stagnates and ambitious people focus their attention on climbing the ladder of corruption. Even if the President realizes that on some level he's running a counterproductively dysfunctional system, he knows that if he starts threatening the economic privileges of the people he counts on to support the regime that his own base will vanish.So that's the story. To get rich you need to either land on a bunch of oil (Qatar) or else have the kind of inclusive institutions that allow for "creative destruction" and widespread opportunity. They don't deny that countries with extractive institutions (the Soviet Union in the 1950s, China in the 2000s) can grow rapidly, but this kind of extractive growth isn't sustainable."
The book uses this notion to explain inequality today, basically saying that western countries are rich because their inclusive economic institutions promote competition and innovation. Innovation is the reason western countries are wealthy. The authors admit that this is a simplistic theory that reduces the complexity of worldwide economics, but it seems to be a good guiding principle in thinking about inequality. I've thought about this book a lot over the past two months and I think their theory is fairly solid.
A Brief History of Inequality
500 years ago, inequality was not as big as it is today. The United States did not yet exist, and England was a small, mostly unknown island. There were no smart phones and no 25 year old billionaires. A small number of elites lived in castles, but most of the world lived in conditions that we would today consider archaic.
Around this time, England started to see the roots the movement that would become the industrial revolution in the 1700s and 1800s. This revolution was driven by advances in technology that made production and life more efficient. With the printing press, it suddenly became much easier to print books. Another machine allowed for clothes to be made easier and cheaper. There were inventors all over Europe, but the political institutions in England happened to change in a way that encouraged innovation; such that it surpassed the rest of Europe.
Europe was controlled by monarchs and by the church. Both of these institutions saw technology as a threat to their power (and rightly so). The book provides many examples of technological innovation being crushed by the ruling powers. In 1583, an English priest named William Lee invented a machine that made knitting much easier. When he presented the machine to Queen Elizabeth, she refused to grant him a patent, claiming that it would deprive her subjects of work and create unemployment. He took his machine to France and received the same response. His invention was also rejected by knitters, afraid of losing their jobs. People were afraid of what economists call creative destruction. Technological advances often create change that benefits the world as a whole, but may hurt certain individuals. A modern example of this would be factory workers that lose their jobs because of globalization.
England happened to be the first country to develop a parliament, which, after many years of struggle with the king gained a significant amount of political power. In the early years, the king used his powers to grant monopolies to certain members of parliament who helped protect him; however, as other business leaders gained power in parliament, they fought for more open economic policies that gave them more opportunity. This was the first step down a path toward free institutions that eventually led to free markets and the capitalist system. People were motivated to innovate because they knew that they could become wealthy. Innovation is what has made certain countries so rich, and changed the world so dramatically in the last 500 years.
Some countries have become fairly modernized without democratic institutions. The best example is Russia, which was a world power on par with the United States for many years during the cold war. In the 1960's and 70's, some economists thought that Russia would eventually overtake the United States to become the worlds most powerful economy. Russia used state sponsored industrialization to grow their economy very quickly, by building factories and incorporating technologies to modernize their economy. This system allowed Russia to catch up to western nations, but didn't really promote innovation. People were not motivated to innovate, because whatever wealth they created would just be redistributed by the government. The Soviet Union's economy did not overtake the US eventually crashing in 1991.
Today, a lot of the great innovations come from Silicon Valley. This is also where a lot of the richest people in the world are made. Bill Gates is one living example. His current net worth is estimated at $84.5 billion. To put that in perspective, the Congolese Governments annual budget is around $5 billion. If Bill Gates wanted to, he could fund the Congolese Government for the next 10 years, out of pocket, and he would still be one of the richest people on the planet. This kind of wealth looks selfish, but the reality is that Bill Gates actions have not made the Congolese poorer. He has in fact made the Congolese, along with the rest of the world, much richer. I'm typing right now on a computer that uses a Windows 7 operating system. The explosion of technology over the last 20 years (computers, smartphones, Internet) has benefited Africa significantly. It has increased inequality, but that doesn't mean it has made people poorer. On the contrary, everyone throughout the world has benefited. 30 years ago, there were no telephones in Bukavu. Today, I can use my $90 smartphone to call my parents on Whatsapp, and it's very cheap. This is the joy of innovation.
There is also a downside to innovation. Englands newfound wealth and power allowed it colonize large portions of the world. Englands neighbor, a small country called Belgium also benefited from the industrial revolution, and decided to get in on the colonization. The King, a man named Leopold II eventually conned his way into owning a large portion of Central Africa. He created aggressively extractive institutions in order to enrich himself and his country. Although he eventually died, his curse lives on to this day, in the form of the extractive institutions he created. That's why Congo is poor today.
African Politics and Creative Destruction
As I said before, creative destruction is one of the central ingredients of innovation. Coined by economist Joseph Schumpeter in 1943, this term describes the destruction of the old system, that inevitably comes when a new and more efficient system arises. It's the downside of competition. According to Schumpeter, creative destruction is the heart of the economy. Inclusive and competitive systems promote innovation and efficiency, but they also creates winners and losers. This is important, because people don't like to lose. When people lose a lot, they tend to get angry. It's important to remember that you're dealing with human beings when you apply economic theories to the real world.
The authors of Why Nations Fail tell an interesting story about Ghana, and what happens when you try to apply economic theories without thinking about the human element. When the country first became independent in 1957, it was led by a man named Kwame Nkrumah. Known to be extremely dedicated and very politically intelligent, he was making some strange economic choices. His policies focused on developing state industry, in a seemingly illogical and inefficient way. In one example, a footwear factory was built in the southern part of the country while hides need to make the shoes were produced 500 miles to the north. The main market for shoes was in the middle of the country. The location of the factory created a lot of unnecessary transport cost (very inefficient). It would have been much more efficient to build the shoe factory in the north. This is one of many examples. In another, the government built a mango canning factory in a part of the country where mango's don't grow.
This was all very confusing to Western economic advisers, but the purpose eventually became clear. Nkrumah needed these projects to buy political support and maintain his government. In 1969, Kofi Busia took over as president. He was an opponent of Nkrumah, but used a similar system of giving political favors to buy support. In this case, he used price controls to keep agricultural prices low, so that food prices would stay affordable for his urban constituents. The system was not sustainable, and the IMF and World Bank soon pressured him into instituting a currency evaluation. The international institutions were oblivious, but Busia was well aware of the risk he was taking. Massive riots soon led to Busia being overthrown by the military.
We find many stories like this throughout the history of African governments. Leaders make choices that seem illogical economically, but help hold the country together politically. Perhaps the best example in Congolese history is the 1800km Inga-Shaba power line that ran from the capital, Kinshasa, to the copper-rich province of Katanga. The efficient option would have been to continue powering the mines with the local hydro-electric dams that the Belgians had already built, but that would have left local Katangans with more power over one of Congo's main sources of income. Katanga had already tried to secede once, and Mobutu was not willing to risk it again. The 1100 mile power line, that bypassed thousands of villagers without electricity, gave Mobutu the ability to turn off Katanga's power at will.
Mobutu also played the patronage game. Throughout his presidency, he used his massive fortunes to buy the allegiance of the political class, known as Les Grosses Legumes (The Big Vegetables). The economic policies of his 32-year rule were a disaster for Congo, but he did hold the country together. Congo is a country with 495 different tribes, each with their own language. In the first five years of independence there were many attempts at secession by different parts of the country (Katanga in particular). Holding the country together was no small feat.
There are a couple different ways to look at African Politics. One way is that leaders did what they had to do to for them and their countries to survive. Another way is that they were self-centered and corrupt, living in excess while their countries fell apart. Is it possible that these can both be true?
American Politics and Creative Destruction
Trumps rise is another perfect example of human emotion affecting politics and economics. Trump promised to protect Americans from the many creative destruction's created by globalization, mostly related to non Americans taking American jobs. America is one of the best examples of a country with inclusive institutions. Daron Acemoglu and James A. Robinson (the authors of that darn book I keep talking about) think that America is wealthy because of these institutions. Donald Trump wants to change that.
This is a quote from a broadcast last fall where Steve Bannon interviews Steven Miller (these are now two of Trump's main policy advisers.)
I can see Bannon's point of view. He is correct that some Americans are losing in the process of globalization. It seems like Bannon is saying that leaders, both Democrat and Republican, are betraying Americans by giving away these jobs to foreigners. These leaders are probably thinking along the same lines that I am. Although some Americans may lose out in the short term, technological innovation benefits both America and the world in the long term. But is innovation really worth betraying our fellow countrymen?
"BANNON: Where are we in the Trump campaign with the H-1B visas? Because we got the oligarchs down there, man, and they have got Karl Rove and literally hundreds of millions of dollars, and they are coming with one reason. And they are coming for unlimited ability to go throughout the world and have people come here and compete with kids coming out of engineering schools and IT jobs. If you are in your 40s and 50s right now, people will tell you, they haven’t had a raise in decades in IT. What was supposed to be a great career turned out not to be a great career. It’s because of these visas.
And now you got all the engineering schools full of people from South Asia and East Asia. And it’s not that I have any problem with those folks learning, but they are coming here to take these jobs. You have turned over the entire American education system — we have cut out art, we have cut out history, we have cut out music. Why have we done it? STEM, science, technology, engineering, and math. We have told every minority kid in this country, you got to excel at that. What happens? They get into graduate schools, they can’t get engineering degrees, they can’t get into graduate schools because there are all these foreign students, when they come out, they can’t get a job. And they are looking for these people like Ted Cruz and Donald Trump who talk about immigration and talk about H-1B visas to stand up for them against these oligarchs. So where are we on this?
MILLER: Well, that was brilliantly stated."
I presented this topic to my fellow Seeders last week, curious as to how they would respond. Some of them are supporters of Donald Trump. One of them, my friend Aaron, sent me a message the day after Trump won that said "Je suis content (I am happy)." His comments surprised me. He said that Bannon's ideas were selfish. He said that Jesus teaches us to be open and accepting, to offer the shirt off our back for those in need. I told him that I couldn't agree more. These are words that are hard to disagree with. I've heard them since I was a child, but I've never actually given anyone my shirt before. I don't want to walk around naked.
I wrote about this in my last post as well. There are costs to being open and inclusive. It's usually the right thing to do, but a lot of the time we don't do it. We make excuses. I do it all the time. Being closed off at times is a rule of survival in Congo. People often want something from me, usually my time or my money. I'm always scared that I'll be taken advantage of (it's happened many a time). It's easy to become defensive or closed off. I try my best to avoid it, but it's simple a fact of life. I have to take care of myself sometimes. This is a common phrase people use in Congo, justifying their complicity in corruption (je me debrouille, I take care of myself).
One important part of the inclusive institutions theory is that earth has never seen a true 100% inclusive institution. The United States government has progressively become more and more inclusive throughout it's history, but there has always been an "other." The original democracy only applied to white male land owners. After a while we added other white males, later women, and then finally African Americans and all other US citizens. Today the "other" has become a complicated issue in the US. For some it's immigrants. For others it's democrats. I've bonded with many over a mutual disdain for our current president. Can we agree that we all hate terrorists?
America is kind of in this strange existential crisis/ turning point. We're extremely divided and we're making important decisions about what we want to be as a country. A lot of the current divisions are rooted in the post-WWII years and the changes that took place in the 1960's. America started accepting a lot more immigrants around that time. We also became a lot more economically inclusive, particularly at the end of WWII. In the last election a bit less then half of America decided it is time to take care of ourselves for a few years. Is it possible that Bannon is right? Are we becoming naked? Maybe we should close ourselves off for a little while. But isn't that selfish and what about innovation?
I don't know what the future of America holds, but I do know who I am. I'm always going to try despite my failures to be more inclusive, and I'm always going to push for inclusivity, within America and throughout the world. I believe humans will always be more successful together than we are divided.
Part II: My Daily Life
My life in Congo is exhausting and sometimes depressing, but also relentlessly interesting and occasionally inspiring in strange ways. In the past two months I've taken several trips and started a new job teaching English.
Kalemie and the Pygmy People
In February, I was privileged have the chance to travel to Kalemie, a city 300 miles south of Bukavu, on the coast of Lake Tanganika. on a mission to learn about the current Pygmy Bantu conflict that plagues this region and offer some assistance. PPR sent me on the mission along with their regional specialist Pastor Kipandula. We were also accompanied by Dr. Chris Choi, a Korean-American missionary and his friend Michael, a Congolese who speaks good English and Korean. We also had a driver named Prince and a mechanic named Jeremy who came along.
In the States, you can drive 300 miles in half a day, but it takes a lot longer in Congo because of road conditions. Our trip took three days each way, although we might have been able to do it in two if necessary. We stopped in a number of villages on the way down, to talk with the locals and learn about the current relations between the Pygmies and the Bantu. The Pygmies are believed to be the original inhabitants of Central Africa, although the Bantu (which in this case means all the other tribes) have also been in the area for centuries. Pygmies lived in the forests as hunter-gatherers for many years, but have been forced out in recent years by the governments conservation efforts. They often work for Bantu on farms or as domestic help, but do not typically own their own land or farms. This is partly due to a system that makes it very difficult for them to obtain land. A friend told me that they simply don't like farming, because they don't like to wait for the crops to grow. He said they live by the philosophy, "tomorrow will take care of itself."
There are Pygmies all over Central Africa, and you hear all sorts of rumors. A Spanish engineer once told me that there are places in north-eastern Congo where they eat Pygmies. This is probably not true, but it's hard to tell sometimes. Other stereotypes like short height seem to generally be true, although I saw one who was probably a little taller than me (maybe 5'9''). They are seen as oppressed although the leaders seem to be well off (I met one Pygmy leader who has 2 wives and 17 kids). I heard another story about some Pygmies using witchcraft to cross the border between Congo and Burundi without passports (as most are not registered with the government).
The Pygmies that I met closer to Bukavu seemed pretty normal, but the Pygmies I met in Kalemie very much fit the stereotypes. They were short, and kind of looked like pirates. A lot of them had bandannas or strange hats, and they were all armed with bows and arrows. Some of them had knives. They also wore necklaces made out of tiny liquor bottles filled with water. I was later told that these are traditional medicines, meant to protect them in battle. A lot of the armed groups in these areas believe similar things. Many of them, called Mai Mai (Water Water) claim that this medicine will turn any bullet shot at them into water.
The conflict around Kalemie is difficult and complicated. Many of the Bantu fled their homes, leaving their harvests to rot in the fields. They went to the displaced persons camps around Kalemie where they get one meal a day, and wait for a chance to return home. The lives of rural Congolese are already very difficult. Many live without power in clay huts. Some of the wealthy like the chiefs can afford a concrete house or a solar panel to power some lights, but it's still not much. Economic activities are scarce. Most people are farmers. The violence prevents the youth from going to school, the one chance they have to maybe improve their lives. It is a rather bleak situation.
Back in the city (Kalemie) people have their own problems. A local pastor (who accompanied us out to the village) shows me a big crack on the back side of his church. The building has clay walls with a sheet metal roof. The rain has eroded the dirt causing the wall to sink in. There is a pile of stone sitting in the corner, but they need concrete before they can fix the foundation. I want to make a contribution but I don't have much (money is always complicated here). The pastor shows us his home (a small shack behind the church) before feeding us a delicious meal of fish, chicken, fries, rice, fufu, and lenga lenga (boiled greens). The next day I eat a similarly delicious meal at another local pastors house. Jeremy and Prince like to tease me since they have figured out I like chicken wings. At each meal they repeat, "Jacobo anapenda mbawa" (Jacob likes chicken wings). I ate lots of chicken wings on this trip.
Other life stuff
Life around Bukavu is good. I started teaching English at a local Mennonite Brethren church a month ago, and I'm enjoying that quite a bit. My students are a good combination of young and older people, both men and women. They all seem very excited to be learning English. It feels good to be doing something that will hopefully yield some concrete results in the next year.
I just got back from a short trip to Bujumbura, where we had a small retreat with other seeders. I got to hang with my friend Jacob Yoder, I gave a presentation about creative destruction, and I saw a hippo. It was a good time. We also had a MCC retreat here in Bukavu. Both of the retreats were relaxing and gave me a new perspective about my time here. I'm excited about everything that I will get to do and learn over the next year.
This picture was taken in a small pygmy village outside Uvira. To the right of me, you can see Dr. Choi and Pastor Kipandula
The group with some local leaders. The guy in the red shirt is the Pygmy chief who has 2 wives and 17 children.
Inside the hut talking with the two local leaders. That's Michael there on the left.
Meeting with Bantu villagers. The three new people are all local pastors.
Pastor Kipandula preaching while a local pymgy leader (in the chair) listens.
A couple pygmies showing off their weapons. The army guy (not a pygmy) had a big bazooka looking weapon. The guy in the orange vest is named Jonas. He is a very courageous local youth, who gave a great speech during the meeting about why they need peace.
Our driver Prince and I
Prince and Jeremy load up the vehicle
Me with a local pastor
Herders driving their cattle down the road
Everyone standing around a peace tree planted by the UN in January.
Dr. Choi has fun passing out balloons and trading hats with the locals.
One of the pygmies poses for a picture. The bottles around his neck are filled with water. They call this a traditional medicine that will protect him in battle.
Getting ready to leave.
We broke down a couple of times during the trip. It's always good to have a mechanic along when you travel long distances in Congo.
The whole Seed team, together in Bujumbura.
Me with my good friend and Donald Trump supporter Aaron Balume
Here's the hippo. It kind of looks like a rock in this picture.
Here's the hippo swimming around.
I played some songs at this showcase last week (this is actually the same room I teach English in). I didn't get any video of my performance, but here's some other dudes shredding.
The full MCC team in Eastern Congo. I'm grateful to be surrounded by these wonderful people.
