Botswana’s Workers Are Its Unmined Diamonds – Kevin D. Williamson

Continuing as a diamond-based economy becomes less tenable by the day. Lab-grown diamonds have led to a collapse in demand for mined stones, which has been nothing short of disastrous for Botswana, where diamonds account for 25 percent of GDP and 80 percent of exports, as well as about half of government revenue. In late September, the state-run diamond trader put 1 million carats of diamonds up for sale in an auction that failed when no bidder would pay the reserve price.

Once noted for its prudent governance, the country has seen rising public debt (projected to double to more than 40 percent of GDP in the coming year, which would be relatively low for the United States but is high for such a country as Botswana) and recently suffered a credit downgrade of its sovereign obligations.

The economic vectors do not look promising: The price of natural diamonds has declined by 26 percent since 2022, which surely is a lagging indicator chasing the fact that the price of synthetic diamonds has declined by 74 percent since 2020. But if the price of aesthetically pleasing hunks of carbon tells a sad story for diamond diggers, there are three other numbers that do a lot more work in demonstrating what ails Botswana and what needs to be done to encourage the emergence of broader and more durable prosperity in the country: 23, 70, and 2. 

The first number indicates Botswana’s unemployment rate, which recently has hovered around 23 percent—and the figure is worse for young people. That is a great deal of human capital on the sidelines. But the next two numbers point to an even less tractable problem: About 70 percent of the Botswanan workforce is employed in agriculture, collectively producing about 2 percent of GDP—which is to say, the great majority of the country’s workers are employed in an industry that produces almost no value If you want to create real economic value in agriculture, then you’re talking about those big “factory farms” and commodity crops that so bother the sentimentalists. Disorganized, small-scale farming creates a lot of jobs but not much output in return for all that hard work. 

Sometimes, a job is not the solution to an economic problem. Sometimes, the job is the problem. But that can be hard for a certain kind of person to see. Those people instead worry what is to be done with all those Botswanan farmers if the farm jobs go away—not that they dream of their own children laboring in sorghum fields, of course. 

I hesitate to go so far as to insist that Paul Ehrlich is a racist, but I will note that his infamous 1968 book, The Population Bomb—a would-be prophecy that has proved wrong on every single major point but remains shockingly influential—was inspired by the crowds of brown people the author observed in Delhi and by what he believed to be the dysgenic fecundity of Indian families, while the movement he midwifed into existence has long regarded population growth in Africa and Asia with especial horror. Strange that nobody complains there are too many Norwegians in the world or an excess of Swedes who will, as the Malthusian logic insists, eventually deplete the world’s supply of herring before it can be pickled. 

With the economically advanced nations desperately trying to work out a viable solution to the threat of demographic collapse that hangs over the rich world, too many of us—on both sides of the political aisle—cling to an economic superstition based on a version of Ehrlich’s error: that human beings are a liability rather than an asset, and that there are too many workers in the world and not enough jobs to go around, that people are simply mouths to be fed and that a job—any job—is the way to feed them.

But creating jobs is no problem, as Botswana’s farms demonstrate so ably: All that is needed is a mode of production that is sufficiently inefficient. We could create 10 million new jobs in the United States tomorrow if we would simply abandon our high-tech farming equipment and go back to hand tools—and then create 100 million new jobs the day after that if we traded in our shovels for spoons. We’d probably starve to death in great numbers, but there would be no unemployment. 

It is dead simple to create jobs. 

World War II created millions and millions of jobs—jobs killing people, jobs destroying the physical apparatus of human civilization, jobs building advanced instruments for the industrial-scale killing of people and the worldwide destruction of economic assets (and cultural treasures and churches and homes and hospitals and nurseries) but the world was no richer for all that extra employment. Those who think World War II ended the Great Depression in the United States should probably ask themselves why, if that was the case, rationing was necessary in those years, or ask themselves why household consumption, including spending on basic goods and services, continued to decline in the war years in spite of the supposed recovery. War may be a necessary evil, but it is no less an evil for being necessary, and people do not improve their standards of living by massacring one another and destroying cities.

This is a fact that was well-understood by no less a soldier than Dwight Eisenhower: 

That is dramatic stuff. But in cold-eyed terms, what Eisenhower is talking about here is the repurposing of capital from life-enhancing projects to life-destroying projects, which is to say, in less exciting terms, from productive uses to non-productive uses. And while there may be less moral urgency in the case, keeping millions upon millions of workers (in Botswana or anywhere else) employed in nonproductive work—or in marginally productive work—has about the same economic effect as drafting them all into the army and marching them from place to place to no end, or, to invoke the economists’ cliché, having them dig holes and then fill them up all day. That isn’t war, exactly—but it is a war on prosperity.

Consider a point for comparison: There was a brief recession in the United States in 1980, with a total economic contraction of 2.2 percent of GDP—a larger dip for U.S. GDP than the complete elimination of agriculture would represent for the GDP of Botswana today. That is not much output in return for the time and effort of the great majority of a country’s workers. Nobody enjoyed the 1980 recession, but the lost economic production was hardly catastrophic. It surely is the case that 2 percent of GDP isn’t nothing, but it isn’t what you want 7 out of 10 workers keeping busy with. 

People who romanticize a life of living in traditional communities while following ancient folkways and eating locally grown produce ought to move to rural Botswana for a year or two and see how they really like it. Botswanans in the villages do not seem to like it very much: Like much of the rest of Africa—and like the United States not that long ago—Botswana has seen high levels of rural-to-urban migration for many years, a trend that is unlikely to be reversed. There are few if any truly universal observations, but this one gets close: Given a choice between low-level agricultural life and almost anything else, people will choose almost anything else, a fact that has been demonstrated time and again by people ranging from English serfs in the 14^th century to African Americans in the early 20^th century to Botswanan farmers today.

And it is not as though the workers of Botswana are simply unable to do anything other than engage in agricultural activity limited to something somewhere between subsistence farming and modest commercial production—the country’s factories already produce (and export) some industrial goods, such as insulated wiring, along with clothing and other similar consumer goods, while food processing and ore refining are going concerns. The government would very much like to encourage more investment and development of domestic industrial capacity, a project that it has tried to execute with methods that are at times clumsy—e.g., over the summer the president announced a ban on the export of raw minerals (diamonds, copper, etc.) and a requirement that these be processed domestically before export. The method probably is the wrong one, but the goal of climbing up the value chain is one worth aiming at. 

For millions of people and their countries, the first step toward prosperity is a step off the farm. Most modern farming is a capital-intensive, high-tech endeavor with relatively modest labor requirements. Low-capital, labor-intensive farming is generally unproductive, which is why there is so little of it where people have other choices. Happily, there is much need for workers everywhere else: Human action is inherently valuable, and there is always a market demand for it. 

Paul Ehrlich’s great antagonist was Julian Simon, the economist who won that famous bet with Ehrlich and who wrote a book that answered Ehrlich’s population pessimism and then some, titled The Ultimate Resource. Simon’s view—the people-are-assets view—is based on an intelligent and generous understanding of human dignity, one that is by necessity universal. Botswana has a good deal of human capital at its disposal, but that capital needs development, investment, and opportunity, if only because there is a world of difference between an economy in which 70 percent of the workers produce 2 percent of the value and one in which 70 percent of the workers produce 70 percent of the value–or more.

To put it in more concrete terms: Leaving all those workers on the farm is like leaving diamonds in the mine.