I really enjoyed hearing him speak and I would like to share some highlights and reflections.
On both occasions he emphasized that poverty is imposed upon people and does not come from within them. Difficulty in genuinely understanding this comes from an academic or as he put it, birds-eye view of economics. This vantage point provides some distinct advantages for the economist, especially to decipher production, marketing and consumption patterns. However, the problems that people below are perceived to have cannot be clearly understood and what is not understood is invented to fit into seemingly harmonious theories and formulas. Without gaining a “worm’s-eye” view in which one can clearly understand problems faced, solutions will be misguided at best and damaging at worst. Gaining on the ground vision often leads to solutions which are completely opposite to and even inconceivable for the bird’s-eye economist, of which the Grameen bank is a perfect example. All of the economists and bankers told Mr. Yunus that he would never see the money he loaned to the very poor again because the poor are not creditworthy. Of course the very poor are not creditworthy for sizeable consumption loans, but manageable, productive loans can actually increase their creditworthiness by giving them the means to successfully pay back their loans.
This analysis got my mind wandering from the talk to Dr. Jeffry Sach’s book “The End of Poverty”, which takes a distinctively bird’s-eye view of economics and the history of development. What is most interesting to me is that both Sachs and Yunus aim towards basically the same end goal: eradicating extreme poverty. Sachs has gathered the world’s best minds in the field, galvanized a global Millennium Project and set in motion important initiatives upon which he draws to enrich his analysis. He puts his eggs in the basket of trade based, technology driven growth. However, he recognizes that along with financing humanitarian emergencies and public investments, official development assistance needs to be channeled to finance private small businesses and farm improvements “through microfinance programs and other schemes” (246). This would be aimed at raising household incomes, which seems to concur nicely with the micro-finance model created through the Grameen Bank.
However, the talk I heard the other night leads me to believe that even though they use the same vocabulary to name a key poverty eradication strategy, their visions differ in fundamental ways. The essence of Dr. Yunus’ vision is that typical business strategies aimed at accumulating capital and inserting people into the dominant production model, make them into drones, money mongering drones no less. Making money should be appreciated for just that, and not to be confused with the joy that comes from using our knowledge and talents to serve others. Recognizing that one’s prosperity depends on the prosperity of the rest of the surrounding community requires constantly contributing to that community welfare through actions that are aimed at only that and don’t have hidden agendas.
For a micro-credit program directed at the very poor, this means creating social enterprises in which money is made and communities are benefited. Capital is accumulated for the purpose of benefiting the community although the individual and her family are the most obvious beneficiaries.
Clearly, both visions are valid and complimentary as Dr. Sachs lobbies for creating “a global network of connections that reach from impoverished communities to the very centers of world power and wealth and back again” (242), an important element not present in the vision laid out by Dr. Yunus in these talks.
Wishing to illustrate the point that poverty is imposed upon people in a more colorful way, Dr. Yunus compared poor people to bonsai trees. Bonsai trees don’t use bonsai seeds. They come from full stature trees, but are planted within pots that don’t allow their roots to sustain any further growth. Anybody who has his/her “roots” constantly clipped has no opportunity to reach his/her full potential. Although the effects are permanent in some ways, transferring a bonsai tree to a space in which it can develop its roots will allow it to grow to previously unimagined heights. Micro-credit directed towards creating social enterprises has this very purpose and the testimonies he gave indicate that they fulfill this purpose more frequently than not.
As readers of this blog know, I am on the Board of Directors of a Grameen replica bank in