Top positive review
"For you have eaten up the vineyard; the plunder of the poor is in your houses."
Reviewed in the United States on January 5, 2018
To plunder means “to steal goods violently from a place, especially during a war.” It is a strong and powerful word, as it brings to mind images of pillage, looting, and desolation. Plunder can take the form of greed, corruption, and warfare. Paul Collier addressed these forms of egregiously bad governance and severe malpractices in his previous work. In a series of influential papers, he showed that civil wars in Africa are immensely costly, tearing apart societies in a way that takes decades and millions of dollars to repair, and that they are more often fueled by greed over coveted resources than by grievance born from past injustice. In his previous book, Wars, Guns, and Votes, he focused on power acquired through violence or rigged electoral processes in order to control the resources offered by statehood in poorly governed countries. In The Plundered Planet, he addresses less violent forms of plunder: here, the coveted asset is nature and the plunder takes the form of economic exploitation of natural resources. For Paul Collier, plunder is an economic phenomenon: “if incentives are misaligned, natural assets are depleted and natural liabilities accumulated, without due regard for the future.” Economic plunder takes two distinct forms. “In one, natural assets that should belong to all the citizens of a nation are expropriated by the few for their private benefit. In the other, natural assets that should belong to all generations are expropriated by those citizens currently alive for their own benefit.”
Who is responsible for plundering our planet? What explains this lack of consideration for the well-being of entire populations and of future generations? The real culprit is not greed and avidity, which Collier sees as part of human nature—as is compassion and generosity, although economists often tend to forget the better angels of our nature. The reason we are plundering our planet is because incentives are not properly aligned, and because checks and balances are not always in place to rein in the avidity of economic and political actors. Plunder is usually tempered by regulations. These regulations are severely lacking in countries that Collier describes as host to the “bottom billion”, the part of humanity that still lives in abject poverty. In these impoverished countries at the bottom of the world economy, rules are often manipulated by political leaders for their persona advantage. Private companies take advantage of this corrupt environment to negotiate deals and seize resources, depriving populations of their rightful share. At the global level, where no government exists to enforce global rules, regulation is almost nonexistent. The consequence is that “for those natural assets and liabilities that are global, such as the fish of the ocean and the carbon of the skies, plunder is currently the standard.” If the diagnosis is correct, the remedy is straightforward: set incentives right, especially through the price mechanism, and plunder will disappear, to give way to efficient management of natural resources.
On this point at least, Collier doesn’t depart from standard economics. But he has some qualms with his colleagues’ approach to ethics. On the one hand, economics assumes that people are interested only in their own consumption, and that they will do everything in their power to maximize their own private utility. On the other hand, economists make prescriptions according to an ethical framework that is selfless in the extreme: society as a whole should maximize the utility of all its members, including future generations that are not yet born. Since poor people take more utility from an extra unit of revenue and consumption than richer people, resources should be distributed equally, or saved in their entirety for future consumption. The result is moral confusion: “Polarized between an ethical framework in which people ought to behave like saints, and a view of human nature in which they actually behave more like psychopaths, economists are often unenthusiastic about democracy. They prefer an authoritarian government that tells people what to do, and takes its advice from economists.” Economists are also uncomfortable with nations and borders: these artificial divisions hamper the efficient allocation of resources, and should, in their opinion, be replaced by a world government.
Paul Collier shows that this theoretical framework can easily be amended to allow for a richer and more realistic ethics. First, he acknowledges that the nation-state is a legitimate institution, one in which democratic choice and accountability of public action can be fully exerted. The natural assets that lie within a nation’s historic borders are a legitimate property of its people, and the revenues from their exploitation should accrue to the whole population. Second, the rights of future generations should be taken into account in present decisions over production and consumption: “we have an ethical responsibility to bequeath to unborn generations either the natural assets bequeathed to us, or other assets of equivalent value.” Third, nations have no right to harm the citizens of other nations, either directly or indirectly, to benefit their own nationals. In particular, resources held in common, or liabilities that accumulate across and beyond borders, should be managed collectively. He calls this simple framework an ethics of custody, and shows that it is consistent with values held by most people regardless of their cultural or religious proclivities. Interestingly, he notes that custody over nature resonates with the Christian concept of stewardship, by which God entrusts on mankind the management of his dominion. Indeed, the word “plunder” has many occurrences in the Bible, where it describes the many acts of war and conquest by the ancient tribes of the Old Testament.
Another concept that has strong religious undertones is the notion of curse, as in the “resource curse.” For Paul Collier, who doesn’t use these words in their Christian acceptation, the riches provided by nature should be a blessing. Instead, they are a double curse: first, people in their vast majority are deprived of their rightful possession by corrupt elites and exploitative international firms; second, the countries that harbor these resources fall into a cycle of bad governance, internal warfare, and economic shrinking. For Collier, the resource curse is “the most crucial issue in the struggle to transform the poorest societies.” In order to analyze the problem, he decomposes the exploitation of natural resources into a chain of decisions: discovering natural assets with the help of specialized expertise while avoiding a gold rush; negotiating with international companies for their exploitation while countering corruption; setting the tax system right to capture rents without frightening investors; determining the right level of resource extraction to balance the interests of present and future generations; managing the economy through periods of booms and decline; investing in the economy to absorb the resource windfall and redistribute it to the population. Each part of this decision chain is subject to the weakest link phenomenon: miss one important step, and the whole chain will unravel.
Like all scientists, Paul Collier stands on the shoulders of giants. As he acknowledges in an appendix, “there is an enormous academic literature on the themes covered in this book.” But he chooses to list as sources only the papers that he coauthored, and he also pays tribute to his junior coauthors by underscoring their contribution in the text. Many paragraphs read like the translation of academic papers into everyday language. Paul Collier is better at doing so than, say, a journalist or another academic colleague, because he lets us enter into the kitchen of his research, explaining how he developed his ideas and went about to confront them to empirical data. This way he is best placed to interpret his own work, whereas referring to others’ lines of research would have him venture ideas on which he can claim no ownership. To be true, he acknowledges the role of prominent economists, who happen to be his close friends, such as Nicholas Stern, Anthony Venables, and Michael Spence, who contributed a lot to shaping his views on the economics of nature. It would have been interesting, however, to underscore the points on which his research results differ from those of other authors, or the debates and controversies that they may have fueled (his thesis that greed trumps grievance in civil war is highly controversial among political scientists). Likewise, his emphasis on a limited number of research results makes the book’s shelf life rather short, as the research field evolves quickly: we don’t know which results will stand the test of time and will lead to new investigations, or which ones will ultimately prove to be dead ends.
Much as an economist builds on accumulated results, he also relies on datasets. Here the role of shouldering giants are played by international institutions such as the World Bank, or research consortiums such as the one who produced the Polity IV database that measures a country’s degree of democracy or autocracy along time. Having worked as director of research at the World Bank, Paul Collier was in a key position to promote the elaboration and dissemination of these datasets, which are international public goods on which social scientists depend a lot. In his book, he use indicators drawn from the Doing Business database or the CPIA measure of governance as well as a commercial rating called the ICRG that also evaluates the quality of governance. He also refers to the global inventory of subsoil assets that was pieced together by the World Bank in 2000 and that forms the basis of green accounting. These data series form the bread and butter of economists; without them, it would not be possible to ground ideas and proposals on concrete evidence. One should note, however, that economists increasingly question the way these indicators are used in cross-country regressions, which is the favorite methodology used by Paul Collier for his empirical testings.
But Paul Collier’s research is not only based on complex economic reasoning and statistical testing; his policy proposals are also grounded on plain common sense and an acute sense of observation. Sometimes, talking to people yields the best ideas. Paul Collier refuses to be confined to the role of the ivory-tower economist. He records the conversations he had with the rich and the powerful: he was invited to present his ideas to a meeting of G20 finance ministers, advised the President of Sierra Leone on how to run auctions for allocating extraction rights, and addressed a gathering of African officials chaired by the President of Cameroon. The reason economists like Paul Collier are called by leaders and invited to international forums is because they tend to think outside the box. Especially in environmental matters, where debates are often obfuscated by ideological arguments, economists are natural contrarians. They do not shy away from picking up a good fight, too. Like many World Bank economists, Paul Collier likes to chide his colleagues from the IMF: he shows that their policy recommendations are often impractical and based on false assumptions. Contrary to many pundits, he has a nuanced view of China’s economic role in Africa. While he is the first to acknowledge the plunder that is taking place in the race to secure resource extraction deals, he also points that Chinese-style deals might also be attractive to reformers, locking in decisions to invest in infrastructures. China is also the only donor offering to finance geological surveys for free.
Like in The Bottom Billion, there is a moral dimension to Paul Collier’s books. Here the author’s moral impulse collides with his professional identity as an economist. The ethics of nature that he outlines is inconsistent with the values and beliefs that economists tend to nurture. Saving the planet, and managing natural resources for global prosperity, requires much more than setting price incentives right: it is a moral calling that has strong religious undertones. Recall that Collier’s concept of custody is close to the Christian’s notion of stewardship. In another book on democratic governance in Africa, he notes that Christian individuals (especially women) in high office are more committed to the public good. Of course, Paul Collier doesn’t preach or proselytize for his parish: he has too much humor and intellectual modesty to be cast in the role that Jeffrey Sachs now occupies in intellectual debates about global poverty. But the force of his arguments come from the fact that they are inspiring as well as intellectually compelling. Like after a good homily, the listeners feel uplifted and come out of the assembly with renewed resolution to do good. This is not an attitude that economics usually encourages. I would submit The Plundered Planet to the church pulpit test: if I were a pastor (or a rabbi, or an imam), would I recommend this reading to my parish? The answer is a resounding yes, but I would make sure it is accompanied by an uplifting sermon. Among the many Bible quotes that mention plunder, I would choose Isaiah 3:14: “The LORD will enter into judgment with the elders of his people, and its princes: For you have eaten up the vineyard; the plunder of the poor is in your houses.”