Murkier beginnings of League of Nations – White Man’s Burden

From William Easterly’s masterly “Tyranny of Experts”

The negotiations in Versailles for a treaty to end World War I occupied the first half of 1919, until the participating nations signed the treaty of Versailles on June 28, 1919. Although twenty-seven nations participated in the Versailles talks, the dominant powers were the United States, the United Kingdom, and France.

The first decision was to transform former German colonies into “mandates.” The mandates were places, not commands. They were regions whose trustees answered to the League of Nations (the precursor international organization to the United Nations) that was also created at the Versailles conference. This was the context for Woodrow Wilson’s inaugural address quoted above about how “the first time in history the counsels of mankind are . . . concerted” to improve “the conditions of working people . . . all over the world.” Wilson spelled out the idea of the mandates further “with regard to the helpless parts of the world”: “All of those regions are put under the trust of the league of nations, to be administered for the benefit of their inhabitants—the greatest humane arrangement that has ever been attempted—and the rules are laid down in the covenant itself which forbid any form of selfish exploitation of these helpless people by the agents of the league who will exercise authority over them during the period of their development.”

The mandates were not directly relevant to China, which was not a colony. However, the idea of development as a neutral enterprise in some territories “for the benefit of their inhabitants” would indeed be relevant in China. It was one of the first statements of technocratic development, in which the focus is on the development of the “helpless” and not on who is doing the developing. It displays either naïveté or indifference to who actually holds the power.

In practice, the mandates were hard to distinguish from colonies. The League of Nations awarded the former German colonies to other colonial powers, notably Britain (e.g., Tanzania) and France (e.g., Togo). The League had no enforcement power to prevent “exploitation” by those colonial powers who “will exercise authority over them during the period of their development.” So the mandates just became British or French colonies in all but name. Cynics could dismiss the whole exercise as a power grab by the British and French.

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Murky beginnings of United Nations – White Man’s Burden

From William Easterly’s excellent “Tyranny of Experts”

The triumph of the technocratic idea of development was written into the charter of the new United Nations. On June 26, 1945, in San Francisco at the United Nations Conference on International Organization, representatives of the world’s countries signed the United Nations Charter, which reads in part: “We the peoples of the United Nations,” in order “to reaf-firm faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women and of nations large and small, and . . . to promote social progress and better standards of life in larger freedom,” have determined “to employ international machinery for the promotion of the economic and social advancement of all peoples.”53 This sounds admirable, of course, but there is a fundamental omission. The UN Charter paid at least lip-service to rights and freedom, but it made no mention of independence for colonial peoples. Perhaps it helps to understand this contradiction to learn that the main author of the soaring language of the charter was Jan Smuts, the long-time South African leader and long-time advocate of white rule in Africa. At the conference in San Francisco, Smuts praised the United Kingdom as the “greatest colonial power” in the world. Smuts saw the United Nations as serving “men and women everywhere, including dependent peoples, still unable to look after themselves.”54 The “international machinery” to promote “advancement” of “dependent peoples” included the British Empire. At the time of the UN’s founding, the United Nations and the British Empire were mutually supportive international organizations.

W.E.B. DuBois accused Smuts and the other UN founders of “lying about democracy when we mean imperial control of 750 millions of human beings in colonies.”55

Friedrich Hayek had questioned the moral value of any real power given to an international organization in The Road to Serfdom in 1944. Hayek, with his realism about the Allies wielding such power and his suspicion of unchecked power at any level, reacted a lot like the left-wing anti-imperialist DuBois. He asked, “can there be much doubt that this would mean a more or less conscious endeavor to secure the dominance of the white man, and would rightly be so regarded by all other races?”56

Article 73 of the UN Charter said that some unspecified UN members have “responsibilities for the administration of territories whose peoples have not yet attained a full measure of self-government.” As Lord Hailey pointed out in the 1956 revision of the Africa Survey, this provision did not give “the organization of the United Nations any authority to intervene in the control of these territories.” The article requires such members to ensure for these peoples “protection against abuses.” This article thereby firmly required colonial powers to protect their colonial subjects against—themselves.57

When the United Nations published its first report on development in 1947,Economic Development in Selected Countries: Plans, Programmes and Agencies, it included plans for “British African Non-Self-Governing and Non-Metropolitan Territories” and “French African Overseas Territories.” The introduction to the report lumps together all “governments of the less developed countries,” including the European colonial rulers of these territories next to local rulers like those in Argentina, Brazil, Chile, Poland, and Yugoslavia. The report declared that all members of this diverse group of autocrats, democrats, Stalinists, and colonizers shared the “ultimate aim in economic development” which “is to raise the national welfare of the entire population.

Why do rich people donate to museums or charity?

It’s not just philanthropic. Sometimes it’s just selfish self-interest. From John Brook’s “12 Business Adventures of Wall Street”:

But if the [Tax] Code is anti-intellectual, it is probably so only inadvertently—and is certainly so only inconsistently. By granting tax-exempt status to charitable foundations, it facilitates the award of millions of dollars a year—most of which would otherwise go into the government’s coffers—to scholars for travel and living expenses while they carry out research projects of all kinds. And by making special provisions in respect to gifts of property that has appreciated in value, it has—whether advertently or inadvertently—tended not only to force up the prices that painters and sculptors receive for their work but to channel thousands of works out of private collections and into public museums. The mechanics of this process are by now so well known that they need be merely outlined: a collector who donates a work of art to a museum may deduct on his income-tax return the fair value of the work at the time of the donation, and need pay no capital-gains tax on any increase in its value since the time he bought it. If the increase in value has been great and the collector’s tax bracket is very high, he may actually come out ahead on the deal. Besides burying some museums under such an avalanche of bounty that their staffs are kept busy digging themselves out, these provisions have tended to bring back into existence that lovable old figure from the pre-tax past, the rich dilettante. In recent years, some high-bracket people have fallen into the habit of making serial collections—Post-Impressionists for a few years, perhaps, followed by Chinese jade, and then by modern American painting. At the end of each period, the collector gives away his entire collection, and when the taxes he would otherwise have paid are calculated, the adventure is found to have cost him practically nothing.

The low cost of high-income people’s charitable contributions, whether in the form of works of art or simply in the form of money and other property, is one of the oddest fruits of the Code. Of approximately five billion dollars claimed annually as deductible contributions on personal income-tax returns, by far the greater part is in the form of assets of one sort or another that have appreciated in value, and comes from persons with very high incomes. The reasons can be made clear by a simple example: A man with a top bracket of 20 per cent who gives away $1,000 in cash incurs a net cost of $800. A man with a top bracket of 60 per cent who gives away the same sum in cash incurs a net cost of $400. If, instead, this same high-bracket man gives $1,000 in the form of stock that he originally bought for $200, he incurs a net cost of only $200. It is the Code’s enthusiastic encouragement of large-scale charity that has led to most of the cases of million-dollar-a-year men who pay no tax at all; under one of its most peculiar provisions, anyone whose income tax and contributions combined have amounted to nine-tenths or more of his taxable income for eight out of the ten preceding years is entitled by way of reward to disregard in the current year the usual restrictions on the amount of deductible contributions, and can escape the tax entirely.

Thus the Code’s provisions often enable mere fiscal manipulation to masquerade as charity, substantiating a frequent charge that the Code is morally muddleheaded, or worse. The provisions also give rise to muddleheadedness in others. The appeal made by large fund-raising drives in recent years, for example, has been uneasily divided between a call to good works and an explanation of the tax advantages to the donor. An instructive example is a commendably thorough booklet entitled “Greater Tax Savings … A Constructive Approach,” which was used by Princeton in a large capital-funds drive. (Similar, not to say nearly identical, booklets have been used by Harvard, Yale, and many other institutions.) “The responsibilities of leadership are great, particularly in an age when statesmen, scientists, and economists must make decisions which will almost certainly affect mankind for generations to come,” the pamphlet’s foreword starts out, loftily, and goes on to explain, “The chief purpose of this booklet is to urge all prospective donors to give more serious thought to the manner in which they make their gifts.… There are many different ways in which substantial gifts can be made at comparatively low cost to the donor. It is important that prospective donors acquaint themselves with these opportunities.” The opportunities expounded in the subsequent pages include ways of saving on taxes through gifts of appreciated securities, industrial property, leases, royalties, jewelry, antiques, stock options, residences, life insurance, and inventory items, and through the use of trusts (“The trust approach has great versatility”). At one point, the suggestion is put forward that, instead of actually giving anything away, the owner of appreciated securities may wish to sell them to Princeton, for cash, at the price he originally paid for them; this might appear to the simple-minded to be a commercial transaction, but the booklet points out, accurately, that in the eyes of the Code the difference between the securities’ current market value and the lower price at which they are sold to Princeton represents pure charity, and is fully deductible as such. “While we have laid heavy emphasis on the importance of careful tax planning,” the final paragraph goes, “we hope no inference will be drawn that the thought and spirit of giving should in any way be subordinated to tax considerations.” Indeed it should not, nor need it be; with the heavy substance of giving so deftly minimized, or actually removed, its spirit can surely fly unrestrained.