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Carol Te Headshot

Capitalism for Human Rights?

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If you enter Cambodia, you'll inevitably notice a plethora of non-profits that riddle the country. There has been a 75% increase of orphanages in Cambodia since 2005, new schools teaching English herd kids into classrooms, and civil society organizations working on post-conflict issues have taken root in different provinces. If you walk next door into Vietnam, you will encounter organizations meant to help remaining victims of Agent Orange, homes to accommodate disabled children, and seed money thrust on to impoverished families. The emergence of non-governmental, non-profit organizations in these countries is paralleled in other developing countries. These organizations receive tens of millions of dollars in donation from the international development assistance community, and they have gained prominence in the social, economic and political affairs of their respective countries. They are meant to provide services for citizens that the government does not attend to in order to protect the rights of the people -- yet are they the answer to human rights problems?

Last year, I began my Master's in Human Rights with the belief that economic aid and civil society were the best ways to promote human rights. I had worked in Vietnam and Cambodia and I studied Southeast Asia extensively in college, always with the aim of better understanding how to rebuild post conflict nations. Most of the organizations I worked with were frustrating -- they were at times non-committal in their work and demanded more money than could be accounted for. I wrote that off as symptomatic of small non-profits -- there were so many small organizations that non-profit work had become like a business. I believed that once I started my masters program in Human Rights, I would develop a better grasp of major international institutions, which presumably have stronger tools at their disposal to promote human rights development. But what rights are we talking about? And whom are we trying to protect?

Rights at their core can be political tools used to legitimize governance and domination and to compete against other political systems. What the empowered nations care about are civil and political rights to aid in geopolitical strategies against threatening ideologies; i.e. communism in the past and terrorism today. Western powers use them to promote their own interest in global free trade. Robust civil and political rights institutions are the priority of developed nations, whose wealth and global power enable them to push forward a human rights agenda. Social and economic rights, which are most urgent for developing countries that do not have the power or the wealth to enforce them, are instead considered secondary. Self-interested utilization of human rights is evident when we see how genocides occur again and again in poor countries without interference of richer countries despite the "never again" of the Holocaust, or how richer countries fail to promote economic and social institutions to help people struggling to survive in impoverished conditions in developing countries. There seems to be this justification that promoting civil and political freedoms are sufficient because they are necessary vehicles for procuring social and economic security -- but what if it is the other way around?

It is not a coincidence that many non-profits right now take care of the economically and socially disadvantaged -- economic and social rights are not recognized as important human rights as is evidenced by their absence in international law. So instead the international community pushes aid to both non-profits and the government to even out the structural inequality between civil and political rights and economic and social rights. But it is not enough. Basic economics stipulates that incentives are required for innovation. When organizations or governments are given aid, they aren't going to increase levels of productivity. They are simply not given the incentives to work hard to invest in the future. In fact, economist William Easterly finds that the larger the aid, the lower the savings on the recipient's part -- in effect, aid creates disincentives for the recipient in gathering his or her own resources for development. So, if we cannot count on traditional human rights organizations to make a leap forward, then what should we count on? The answer is trade.

Economic growth requires a free global market. Trade is good for poor countries -- it gives them access to markets in the developed world, it creates more competition for workers, which increases wages, and foreign investment introduces new capital, technology and skills. As economist Dambisa Moyo argues, once there is economic growth, then a middle class can be created to hold the government accountable -- robust institutions can form to create stability. New market potential can reap extraordinary benefits for both natives of the country and the investor. And most important of all, it is sustainable. That is, the infrastructure will not fall apart simply because a donor decides to pull out of a project -- a fate that many NGOs fall prey to.

Of course there are negative aspects to the developed world corporations creeping into developing nations -- there are sweatshops, low wages, evictions of peoples from their land, creative destruction. But for all of the bad there is a push for the good. High risk capital can stimulate growth. This growth benefits future generations and can break them out of the cycle of poverty that otherwise would be perpetuated to the next son and grandson. For instance, China and India were both able to lift hundreds of millions out of poverty and into the middle class through producing cheap exports. In fact, aggressive economic reform led to China loosening its reins on the country through the leadership of Deng Xiaoping, who made pragmatism China's national ideology. Rural households were free to farm their own plots and to keep profits, state firms and the real estate sector were privatized, and trade barriers have been rolled back. Reforms increased income and productivity and conceded more power and freedom to China's people and places. As economist Ruchir Sharma argues, a democratic political system is not necessary for economic success. What matters are the stability of the system and the leaders' understanding of basic economic reforms. After that, growth can happen, which may lead to openness, political and civil rights, and overall human rights accountability.

But first, corporations are needed to invest in market potential.

So, instead of pushing aid to governments and non-profits with the hope of creating some semblance of development, perhaps the best way to help advance the rights of the people is to raise their standard of living by promoting foreign investment in emerging and frontier countries. In this way, markets will grow organically and people will be given incentives to innovate for the betterment of themselves and their society.