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A doctor working in Gondar hospital in Ethiopia wrote to me recently to spell out what this means. The hospital has none of the basic textbooks on tropical diseases it needs. But it does have 21 copies of an 800-page volume called Aesthetic Facial Surgery and 24 volumes of a book called Opthalmic Pathology. There is no opthalmic pathologist in training in Ethiopia. The poorest nation on Earth, unsurprisingly, has no aesthetic plastic surgeons. The US had spent $2m on medical textbooks that American publishers hadn't been able to sell at home, called them aid and dumped them in Ethiopia.

In Britain the Labour government claims to have abandoned such practices, though only because they infringe European rules on competition. But now it has found a far more effective means of helping the rich while pretending to help the poor. It is spending its money on projects that hand public goods to corporations.

It is now giving, for example, £342m to the Indian state of Andhra Pradesh. This is a staggering amount of money, 15 times what it spent last year on the famine in Ethiopia. Why is Andhra Pradesh so lucky? Because its chief minister, or "chief executive" as he now likes to be known, is doing to his state what Pinochet did to Chile: handing everything that isn't nailed down, and quite a lot that is, to big business. Most of the money DfID is giving him is being used to "restructure" and "reform" the state and its utilities.

His programme will dispossess 20 million people from the land and contribute massively to poverty. DfID's own report on the biggest of the schemes it is funding in the state reveals that it suffers from "major failings", has "negative consequences on food security" and does "nothing about providing alternative income for those displaced". But it permits Andhra Pradesh to become a laboratory for the kind of mass privatisation the department is seeking to encourage all over the world.

In Zambia, DfID is spending just £700,000 on improving nutrition, but £56m on privatising the copper mines. In Ghana, the department made its aid payments for upgrading the water system conditional on partial privatisation. Foreign aid from Britain now means giving to the rich the resources that keep the poor alive.

So there are rich pickings for organisations like the Adam Smith Institute. It is being hired by DfID as a consultancy, telling countries like South Africa how to flog off the family silver. It is hard to see how this helps the poor. The South African government's preparations for privatisation, according to a study by the Municipal Services Project, led to almost 10 million people having their water cut off, 10 million people having their electricity cut off, and over 2 million people being evicted from their homes for non-payment of bills.

What we see here, in other words, is a revival of an ancient British charitable tradition. During the Irish potato famine, the British government made famine relief available to the starving, but only if they agreed to lose their tenancies on the land. The 1847 Poor Law Extension Act cleared Ireland for the landlords. Today, the British government is helping the corporations to seize not only the land from the poor, but also the water, the utilities, the mines, the schools, the health services and anything else they might find profitable. And you and I are paying for it.

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