Diminished Capacity

Denuding the Poor

One of the few economic success stories I can name in Africa is the used clothing trade. People in developed countries give vast amounts of clothing every year to charity. Most of it ends up being sold to used clothing traders, who in turn re-sell it to poor people all over Africa for pennies. African governments might do their utmost to destroy their local economies, but at least the invisible hand has usually been left free to clothe the naked.

Until now, that is.

This morning, I heard a story on the BBC World Service that seemed outlandish — they claimed that Uganda was now taxing imports of second hand clothing to "protect" the local clothing industry.

Naturally, I didn't believe anyone could be that stupid, but a quick search on Google reveals that it is true. See this article, for example, and this one. Indeed, it seems that Tanzania and other African countries are doing similar things.

I'm reminded of Frederic Bastiat's brilliant satire, The Candlemaker's Petition, except this isn't a joke — this is nightmarish reality. To protect a tiny economically inefficient local industry, these governments are driving up the cost of clothing bought by the desperately poor.

If you want to know why Africa is an economic basket case, look no further than this sort of insanity.