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pages: 296 words: 87,299

Portfolios of the poor: how the world's poor live on $2 a day by Daryl Collins, Jonathan Morduch, Stuart Rutherford

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Cass Sunstein, clean water, failed state, financial innovation, financial intermediation, income per capita, informal economy, job automation, M-Pesa, mental accounting, microcredit, moral hazard, profit motive, purchasing power parity, RAND corporation, randomized controlled trial, The Fortune at the Bottom of the Pyramid, transaction costs

When Yunus started Grameen, his focus was not on microfinance but on microcredit. Moving to microfinance from the narrower goal of microcredit begins with the recognition that poor households want to save and insure as well as borrow. Lately, Grameen itself, as we discuss in chapter 6, has taken up the cause of saving with energy and innovation. The financial diaries show in daily detail why the shift from an exclusive focus on microcredit to the broader microfinance is an important and welcome advance. But the diaries also show the need to push further. The idea of microcredit has long been associated with the promotion of enterprise: to enable people to purchase productive assets and working stock to set up in business. Microcredit has thus come to be closely associated with the customers’ “microenterprises” (the name signals their small scale; often such enterprises employ just the owner and no other workers.)

When the turn toward microfinance opened possibilities, it did not entail a reassessment of the uses for microcredit. A fundamental but easily overlooked lesson from the diaries is that the demand for microcredit extends well beyond the need for just microenterprise credit. The poor households in the study seek loans for a multitude of uses besides business investment: to cope with emergencies, acquire household assets, pay schooling and health fees, and, in general, to better manage complicated lives. In chapter 6 we show that microcredit is often diverted from its intended uses (of running businesses) to other uses ranked more important by households. This lesson has not yet been well recognized by promoters of microcredit and microfinance. Organizing borrowers into groups who pledge joint liability for each other’s loans (also known as “social collateral”) has been the chief mechanism to ensure repayment on unsecured loans to the poor.

Kanon was a client of a microcredit provider, and before the year had taken a loan of $110 that they used for a string of needs: drugs for Sultan’s health problems, repaying old 99 CHAPTER FOUR loans from neighbors, consumption, and paying overdue rent on the waste-sorting yard. In addition, Kanon’s older daughter, already married and away from home, gave her microcredit loan to Sultan and Kanon to help fund Sweetie’s marriage. Sultan and Kanon gritted their teeth and kept up with the weekly loan payments on both these loans: $3.76 a week, week in, week out. On top of that, they saved another 75 cents each week with the microcredit NGOs. So, for months on end, they managed to squeeze $4.51 out of a weekly income of $20 or less, to repay their loans and save at the microcredit meetings. Or take Sita, whom we met in chapter 2, a widow from the India rural site with low and very uneven income as a farm laborer.


pages: 370 words: 112,602

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty by Abhijit Banerjee, Esther Duflo

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Albert Einstein, Andrei Shleifer, business process, business process outsourcing, call centre, Cass Sunstein, charter city, clean water, collapse of Lehman Brothers, congestion charging, demographic transition, diversified portfolio, experimental subject, hiring and firing, land tenure, low skilled workers, M-Pesa, microcredit, moral hazard, purchasing power parity, randomized controlled trial, Richard Thaler, school vouchers, Silicon Valley, The Fortune at the Bottom of the Pyramid, Thomas Malthus, urban planning

One part of that answer we already know—most of these businesses cannot borrow very much, and what they can borrow is very expensive. But this is not the whole answer. First, as we saw, although there are millions of microcredit borrowers, there are many more who have the opportunity to borrow but choose not to. Ben Sedan was one of them. He had a business raising cows and could have grown it with a microcredit loan, but he decided against it. Even in Hyderabad, where there are several competing MFIs, the sign-up rate for any microcredit loan among families who were eligible to borrow was only 27 percent, and only 21 percent of those who had a small business had taken a microcredit loan. Moreover, even those who cannot borrow can save: Consider the shopkeeper family in Gulbarga. They lived on about $2 per day per person. In nearby Hyderabad, our data show that those with this level of consumption spend about 10 percent of their total monthly expenditures on health care, whereas those living on less than 99 cents a day spend about 6.3 percent.

Trapped by decades of overpromising, many of the leading players in the microfinance world have apparently decided they would rather rely on the power of denial than take stock, regroup, and admit that microfinance is only one of the possible arrows in the fight against poverty. Fortunately, this is not the way the rest of the industry seems to be going. At a conference in New York City in fall 2010, where similar results were presented, all the attendees agreed that microcredit as we know it has its strengths and its limits, and that the next order of business was to see what microfinance organizations could do to deliver more to their clients. THE LIMITS OF MICROCREDIT Why didn’t microcredit deliver more than it did? Why didn’t more families start new businesses, given that they now had access to capital at affordable rates? In part, the answer is that many poor people are not willing, or able, to start a business, even when they can borrow (why this is the case is one of the central themes of Chapter 9, on entrepreneurship).

What is much more puzzling is that even though three or more MFIs were offering credit in the slums of Hyderabad, only about one-fourth of the families borrowed from them, whereas more than one-half borrowed from moneylenders at much higher rates and that fraction was more or less unaffected by the introduction of microcredit. We don’t claim to be able to explain in full why microcredit is not more popular, but it probably has something to do with precisely what makes it able to lend relatively cheaply and effectively—namely, its rigid rules and the time costs it imposes on its clients. The rigidity and specificity of the standard microcredit model mean, for one thing, that since group members are responsible for each other, women who don’t enjoy poking into other people’s business don’t want to join. Group members may be reluctant to include those they don’t know well in their groups, which must discriminate against newcomers.


pages: 494 words: 116,739

Geek Heresy: Rescuing Social Change From the Cult of Technology by Kentaro Toyama

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Albert Einstein, Berlin Wall, Bernie Madoff, blood diamonds, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cognitive dissonance, computer vision, conceptual framework, delayed gratification, Edward Glaeser, en.wikipedia.org, epigenetics, Erik Brynjolfsson, Francis Fukuyama: the end of history, fundamental attribution error, germ theory of disease, global village, Hans Rosling, happiness index / gross national happiness, income inequality, invention of the printing press, invisible hand, Isaac Newton, Khan Academy, Kibera, knowledge worker, libertarian paternalism, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, means of production, microcredit, mobile money, Nicholas Carr, North Sea oil, pattern recognition, Peter Singer: altruism, Peter Thiel, post-industrial society, randomized controlled trial, rent-seeking, RFID, Richard Florida, Richard Thaler, school vouchers, self-driving car, Silicon Valley, Simon Kuznets, Steve Jobs, Steven Pinker, technoutopianism, The Fortune at the Bottom of the Pyramid, Upton Sinclair, Walter Mischel, War on Poverty, winner-take-all economy, World Values Survey, Y2K

It was boosted by the tireless evangelism of advocates like Yunus, who has said that “the purpose of microcredit is to eliminate poverty in the shortest possible time frame.”3 According to proponents, loans allow households to apply existing skills to build up small businesses – microenterprises – and climb out of poverty on their own. Microcredit is supposed to increase incomes, empower women, and enhance health and education outcomes for children. It’s been said that lives are “transformed by microfinance,” and that microcredit “revolutionized global anti-poverty efforts.”4 Today there are as many as 180 million microcredit borrowers worldwide.5 The United Nations declared 2005 the International Year of Microcredit. In 2006, Yunus won the Nobel Peace Prize. But, as even advocates concede, credit is not a panacea.

Many of its borrowers are undoubtedly benefiting. But which ones? A closer look at the economists’ data shows that positive effects tend to favor certain subgroups. Microcredit is more beneficial for those with greater wealth and education; for those with existing businesses; and for those with entrepreneurial skills and temperament; and, in some communities, for the men more than for the women, probably because of other sociocultural advantages.18 In other words, like digital technologies, microcredit also amplifies human forces. But microcredit isn’t a concrete thing like hardware or software. What is doing the amplifying? In essence, it’s a prescribed process for making cash loans. In its classic form, microcredit is based on lending to groups of people who offer a social guarantee instead of financial collateral. Formal banks make loans to the whole group, often mediated by microfinance institutions.

The Technology of Microcredit A good example of a packaged intervention is microcredit. Small-scale lending to poor borrowers, also called microlending or microfinance, is one of the few ideas in poverty alleviation to have attained global reach. There is no end to the tales of $100 loans transforming the lives of low-income households. Muhammad Yunus, the grand patriarch of modern microfinance, likes to tell one such anecdote. He once made a personal loan of $27 distributed among forty-two villagers in Bangladesh. Some of them needed the tiniest bit of cash to buy materials to make bamboo stools. They could pay back the loan and still earn a profit. “I had never heard of anyone suffering for the lack of twenty-two cents,” Yunus wrote.2 That was 1976. In the decades since, microcredit has grown into a titan of social programs.


pages: 346 words: 101,763

Confessions of a Microfinance Heretic by Hugh Sinclair

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accounting loophole / creative accounting, Bernie Madoff, colonial exploitation, en.wikipedia.org, financial innovation, financial intermediation, Gini coefficient, high net worth, illegal immigration, inventory management, microcredit, Northern Rock, peer-to-peer lending, pirate software, Ponzi scheme, principal–agent problem, profit motive

The interest rates paid by some of the poorest women of Africa were displayed prominently for all to see, with the origin of such funds discussed. All this raised a valid question very publicly: Can the poor benefit at such interest rates? This was a triumph for transparency, and for once attention had focused not simply on the activities per se, but on the source of the funding. The Times article went on to quote Muhammad Yunus: “We created microcredit to fight the loan sharks; we didn’t create microcredit to encourage new loan sharks,” Mr. Yunus recently said at a gathering of financial officials at the United Nations. “Microcredit should be seen as an opportunity to help people get out of poverty in a business way, but not as an opportunity to make money out of poor people. . . .” Mr. Yunus says interest rates should be 10 to 15 percent above the cost of raising the money, with anything beyond a “red zone” of loan sharking. “We need to draw a line between genuine and abuse,” he said.

Contents Foreword by David Korten Preface 1 Thou Shalt Not Criticize Microfinance 2 Baptism in Mexico 3 Bob Dylan and I in Mozambique 4 Another Mozambican Civil War 5 The “Developed” World 6 Something Not Quite Right in Nigeria 7 Something Not Quite Right in Holland 8 In Front of the Judge 9 Rustling Dutch Feathers 10 Blowing the Whistle from Mongolia 11 Enter the New York Times 12 Collapse, Suicide, and Muhammad Yunus 13 The Good, the Bad, and the Poor Appendix: Microfinance Economics 101 Notes Acknowledgments Index About the Author Foreword By David Korten Confessions of a Microfinance Heretic provides an insightful, well-documented, and devastating look into the tragic reality of how a good idea was derailed by the same mindless pursuit of financial gain that caused the global financial crash of 2008. It is essential reading for anyone involved in microcredit and for all who are committed to ending global poverty and injustice. For some twenty years we have heard the story that microcredit is the cure for global poverty: An amazing visionary economist in Bangladesh named Mohammed Yunus founded the Grameen Bank and demonstrated a simple, effective way to end world poverty. Small, low-cost loans to the poor unleash their entrepreneurial potential and allow them to start profitable businesses that bring prosperity to themselves, their children, and their communities.

The reality that Hugh Sinclair documents in this book presents a very different picture. Too Good to Be True Microfinance is now a $70 billion industry and some investors and microfinance institutions enjoy eye-popping returns. The industry falls far short, however, of fulfilling its promise to end poverty. Indeed, as Hugh Sinclair spells out in detail, many microcredit programs are nothing more than predatory lending schemes rebranded as socially responsible investment opportunities. There are effective microcredit programs. Sinclair describes one in Mongolia that truly serves the poor with low-cost loans used to fund successful microbusinesses. Tragically, these may be more the exception than the norm. I lived and worked in Asia from 1978 to 1992 as part of the foreign aid establishment. During this time I regularly served as a consultant to several Bangladeshi nongovernmental organizations (NGOs) that were pioneering microfinance along with other innovative programs serving the poor.


pages: 424 words: 121,425

How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy by Mehrsa Baradaran

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access to a mobile phone, affirmative action, asset-backed security, bank run, banking crisis, banks create money, barriers to entry, British Empire, call centre, Capital in the Twenty-First Century by Thomas Piketty, cashless society, credit crunch, David Graeber, disintermediation, diversification, failed state, fiat currency, financial innovation, financial intermediation, Goldman Sachs: Vampire Squid, housing crisis, income inequality, Internet Archive, invisible hand, Kickstarter, M-Pesa, McMansion, microcredit, mobile money, moral hazard, mortgage debt, new economy, Own Your Own Home, payday loans, peer-to-peer lending, price discrimination, profit maximization, profit motive, quantitative easing, race to the bottom, rent-seeking, Ronald Reagan, Ronald Reagan: Tear down this wall, savings glut, the built environment, the payments system, too big to fail, trade route, transaction costs, unbanked and underbanked, underbanked, union organizing, white flight, working poor

Niche “poverty banks” would simply pop up in the market and fill the void created by competitive forces. MICROCREDIT: MARKET-BASED PHILANTHROPY Microcredit, a market-based lending principle, has been the most heralded and controversial modern effort to lend to the poor. Though not a significant part of the financial landscape in the United States, it has swept over the developing world. Just as the credit union movement had evangelical leaders who saw it as the wave of the future and the cure to all sorts of social ills, microcredit was also seen as a potential cure to poverty. Microcredit’s quixotic mission was to help the poor through profitable lending. Muhammad Yunus, the founder of Grameen Bank and the most vocal advocate for worldwide microcredit, won the Nobel Peace Prize in 2006. A true philanthropist and visionary, he has been described as a genius, has appeared on many lists of the most influential thinkers and entrepreneurs, and has even inspired “Muhammad Yunus Day” in Houston, Texas.

Nonprofits like Kiva connect small-scale “entrepreneurs” in developing countries with small-scale financiers, usually from developed countries. Kiva lends small loans at or near 0 percent interest and only lends to verified borrowers with a business plan. Large “microcredit” corporations similar to formalized loan sharks also operate in the Third World. It wasn’t long before the honeymoon with microcredit gave way to widespread criticism. With such ambitious aims and universal hype, the metrics were never quite reachable. Microcredit would not, after all, be the cure to poverty. In fact, the data have been “mixed” as to whether microcredit has even reduced poverty.50 Additionally, the collective group pressure to repay loans, a critical feature of the Grameen model, became oppressive, leading to duress and public shaming. In the span of a few months in 2010, eighty people in the Andhra Pradesh region of India committed suicide after defaulting on microloans, leading Indian officials to instruct the population to stop repaying the loans.51 The model was built on social pressure to repay as a stand-in for contract enforcement in Third World areas where rule of law is not well established.

“Unfortunately, however, the image of Grameen Bank that the U.S. public has imported is at best incomplete and at times quite disputable.” Dyal-Chand, “Distant Mirror,” 24. In 1997, Microcredit Summit was held with the goal of eliminating poverty worldwide by the year 2025. Ibid., 235; “The empirical evidence on the impact of micro-credit on poverty, carried out for Bangladesh as well as for a number of other countries in Asia, Africa and Latin America is very mixed.” M. Jahangir Alam Chowdhury et al., “The Impact of Micro-Credit on Poverty: Evidence from Bangladesh,” Progress Developmental Studies 5 (2005): 299; “Despite its overwhelming success in reaching the poor, induced benefits of microfinance … are debated.” Shahidur R. Khandker and Hussain A. Samad, “Dynamic Effects of Microcredit in Bangladesh,” World Bank Development Research Group Agriculture and Rural Development Team (2014), 2. 51.


pages: 700 words: 201,953

The Social Life of Money by Nigel Dodd

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accounting loophole / creative accounting, bank run, banking crisis, banks create money, Bernie Madoff, bitcoin, blockchain, borderless world, Bretton Woods, BRICs, capital controls, cashless society, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, computer age, conceptual framework, credit crunch, cross-subsidies, David Graeber, debt deflation, dematerialisation, disintermediation, eurozone crisis, fiat currency, financial innovation, Financial Instability Hypothesis, financial repression, floating exchange rates, Fractional reserve banking, German hyperinflation, Goldman Sachs: Vampire Squid, Hyman Minsky, illegal immigration, informal economy, interest rate swap, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, Kula ring, laissez-faire capitalism, land reform, late capitalism, liquidity trap, litecoin, London Interbank Offered Rate, M-Pesa, Marshall McLuhan, means of production, mental accounting, microcredit, mobile money, money: store of value / unit of account / medium of exchange, mortgage debt, new economy, Nixon shock, Occupy movement, offshore financial centre, paradox of thrift, payday loans, Peace of Westphalia, peer-to-peer lending, Ponzi scheme, post scarcity, postnationalism / post nation state, predatory finance, price mechanism, price stability, quantitative easing, quantitative trading / quantitative finance, remote working, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Satoshi Nakamoto, Scientific racism, seigniorage, Skype, Slavoj Žižek, South Sea Bubble, sovereign wealth fund, special drawing rights, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, Wave and Pay, WikiLeaks, Wolfgang Streeck, yield curve, zero-coupon bond

One recent noteworthy manifestation of mutualist principles has been the microcredit movement, and in particular, the Grameen Bank founded in Bangladesh by Muhammad Yunus in 1976. The principle behind microcredit is to provide loans that would normally be too small for ordinary banks. The idea of collectivism is built into the very structure of the loan, which is made to a “solidarity group”: if one person defaults, the credit record of all group members is tarnished (although other group members are not actually liable for that portion of the loan).16 Besides encouraging collectivism, the principle behind microcredit is that, when compared with charity, lending—within limits—can be empowering. Critics, on the other hand, argue that microcredit amounts to little more than the privatization of welfare, draws many borrowers into a debt trap, and reinforces extant gender inequalities (Rankin 2001; Karim 2008; Faraizi, Rahman, et al. 2010).

Critics, on the other hand, argue that microcredit amounts to little more than the privatization of welfare, draws many borrowers into a debt trap, and reinforces extant gender inequalities (Rankin 2001; Karim 2008; Faraizi, Rahman, et al. 2010). The microcredit movement (including global organizations such as Kiva) has been enormously successful: solidarity lending now operates in forty-three countries worldwide. The Grameen Bank, principally owned by its borrowers, has spawned a large network of organizations, such as trusts and nonprofit ventures, including Grameen America, which made more than $85 million worth of loans between 2008 (when it was founded) and 2013.17 However, microfinance recently underwent a crisis of its own, analogous perhaps to the subprime crisis.18 The problem, to a degree, was one of scale: microcredit was becoming a victim of its own success as new companies were attracted to the system for commercial, rather then ethical, reasons: some of these were engaging in lending practices that resonate with subprime, such as failure to conduct proper credit checks and lending unrealistic amounts (Wichterich 2012).

This is an issue about which many of Gesell’s followers, such as the organizers of Freicoin, disagree with him. 16 The majority of such loans have been made to women: 97 percent in Bangladesh. 17 See http://grameenamerica.org/financial-info. 18 Chris Gregory, for example, calls the Indian crisis a “a collapse of the classic sub-prime lending kind” (Gregory 2012: 394). 19 See “Microfinance: Small Loan, Big Snag,” Financial Times, December 1, 2010. 20 In an intriguing aside that resonates with our discussion of the moral economy of debt in Chapters 3 and 4, Gregory suggests that as the problems associated with microcredit have emerged, so has the language used to describe it change: microcredit has increasingly become microdebt (Gregory 2012: 394). He writes of Yunus: “Yunus is a village money lender who lends money on interest to the poorest of the very poor. What distinguishes him from other village money lenders is his success both financially and socially: he is probably the biggest village money lender in human history (8.32 million borrowers in 2010) and perhaps the only one in human history who is not looked down upon as an exploiter of the human misery of the masses.


pages: 293 words: 81,183

Doing Good Better: How Effective Altruism Can Help You Make a Difference by William MacAskill

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barriers to entry, Black Swan, Branko Milanovic, Cal Newport, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, corporate social responsibility, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Brooks, effective altruism, en.wikipedia.org, experimental subject, follow your passion, food miles, immigration reform, income inequality, index fund, Isaac Newton, job automation, job satisfaction, labour mobility, Lean Startup, M-Pesa, meta analysis, meta-analysis, microcredit, Nate Silver, Peter Singer: altruism, purchasing power parity, quantitative trading / quantitative finance, randomized controlled trial, self-driving car, Skype, Stanislav Petrov, Steve Jobs, Steve Wozniak, Steven Pinker, The Wealth of Nations by Adam Smith, universal basic income, women in the workforce

Only after looking at randomized controlled trials could we tell that correlation did not indicate causation in this case and that Scared Straight programs were actually doing more harm than good. One of the most damning examples of low-quality evidence concerns microcredit (that is, lending small amounts of money to the very poor, a form of microfinance most famously associated with Muhammad Yunus and the Grameen Bank). Intuitively, microcredit seems like it would be very cost-effective, and there were many anecdotes of people who’d received microloans and used them to start businesses that, in turn, helped them escape poverty. But when high-quality studies were conducted, microcredit programs were shown to have little or no effect on income, consumption, health, or education. Rather than starting new companies, microloans are typically used to pay for extra consumption like food and healthcare, and the rate of interest on them is usually very high.

“one $10 bed net can mean the difference between life and death”: “Saving Lives,” Nothing But Nets, http://www.nothingbutnets.net/new/saving-lives/. But when high-quality studies were conducted: See, for example, David Roodman, Due Diligence: An Impertinent Inquiry into Microfinance (Washington, DC: Center for Global Development, 2012). Roodman comments: “On current evidence, the best estimate of the average impact of microcredit on poverty is zero. . . . The commonsense idea that credit is a useful tool that sometimes helps and sometimes hurts appears close to the truth.” (http://www.cgdev.org/doc/full_text/DueDiligence/Roodman_Due_Diligence.html). Initially, there were academic studies conducted on microfinance that did seem to show strong impact, summarized in Nathanael Goldberg, Measuring the Impact of Microfinance: Taking Stock of What We Know, Grameen Foundation, December 2005, http://files.givewell.org/files/Cause1-2/Independent%20research%20on%20microfinance/GFUSA-MicrofinanceImpactWhitepaper-1.pdf.

However, these studies weren’t randomized; when randomized controlled trials came out, they changed the picture dramatically. This example illustrates just how important getting high-quality evidence is: low-quality evidence can include highly cited academic studies, not just anecdotes. For an overview of the “hierarchy of evidence,” see Trisha Greenhalgh, “How to Read a Paper: Getting Your Bearings (Deciding What the Paper Is About),” BMJ 315, no. 7,102 (July 26, 1997), 243–6. Note that microcredit is only one form of microfinance; other forms of microfinance, such as microsavings (providing secure places for the very poor to save money), have shown promise. Rather than starting new companies: In an interview with Time, David Roodman from the Center for Global Development commented that “there are a fair number of stories where women cannot pay back their loans but they’re in [community borrowing groups].


pages: 335 words: 104,850

Conscious Capitalism, With a New Preface by the Authors: Liberating the Heroic Spirit of Business by John Mackey, Rajendra Sisodia, Bill George

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Berlin Wall, Buckminster Fuller, business process, carbon footprint, collective bargaining, corporate governance, corporate social responsibility, crony capitalism, cross-subsidies, en.wikipedia.org, Fall of the Berlin Wall, fear of failure, Flynn Effect, income per capita, invisible hand, Jeff Bezos, job satisfaction, lone genius, Mahatma Gandhi, microcredit, Occupy movement, profit maximization, Ralph Waldo Emerson, shareholder value, six sigma, Steve Jobs, Steven Pinker, The Fortune at the Bottom of the Pyramid, The Wealth of Nations by Adam Smith, too big to fail, union organizing, women in the workforce

We’ve concluded that the best way for us to support the communities we trade with is to work to alleviate poverty through micro-lending programs. Initially, we worked exclusively with Mohammed Yunus and his pioneering microcredit lending institution, the Grameen Trust. The Whole Planet Foundation now works with many local microfinance organizations that are already offering microcredit in a community. We engage in thorough research and due diligence to find partners most aligned with our values. We are now in fifty-plus countries and have provided more than $35 million in capital to fund over two hundred thousand microcredit loans. The average first loan size is about $133, and 92 percent of the loans have been made to women. The money recycles back and is loaned out again and again; it stays permanently in those communities.

Eventually, as Whole Foods Market grows larger, our trading network will expand, and we hope someday to make loans in every country in the world with a microcredit industry.3 Conscious Philanthropy and Stakeholder Value The Whole Planet Foundation is a good example of how conscious philanthropy can work for the benefit of the investors. Probably nothing we have done in our history at Whole Foods Market has raised the morale of the organization more than the work of this foundation; our team members are so excited and proud of what we’re doing to help end poverty. It is a great example of philanthropy that creates value for every one of our major stakeholders. Once a year, we conduct a “prosperity campaign” that lasts six weeks. We give our customers the opportunity to donate to the Whole Planet Foundation to fund microcredit loans. We promote the campaign in our stores with brochures and posters.

We want to raise the public’s collective awareness about the principles of healthy eating: a diet that is centered on whole foods, is primarily plant based, is nutrient dense, and includes mainly healthy fats (minimal animal fats and vegetable oils). We believe this diet will radically improve the health of millions of people by helping prevent and reverse the lifestyle diseases that are killing so many of us—heart disease, stroke, cancer, diabetes, and obesity.5 Through the Whole Planet Foundation, we want to help end poverty around the world by making microcredit working-capital loans to millions of impoverished people to help them create and improve their businesses. We want to help make Conscious Capitalism the dominant economic and business paradigm in the world to spread human flourishing. The purpose of a business does not have to be confined to only one of the four great ideals. Many businesses straddle multiple purposes. In some ways, Whole Foods Market is pursuing the Good, the True, the Beautiful, and the Heroic simultaneously.


pages: 207 words: 86,639

The New Economics: A Bigger Picture by David Boyle, Andrew Simms

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Asian financial crisis, back-to-the-land, banking crisis, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, capital controls, carbon footprint, clean water, collateralized debt obligation, colonial rule, Community Supported Agriculture, congestion charging, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, delayed gratification, deskilling, en.wikipedia.org, energy transition, financial deregulation, financial innovation, full employment, garden city movement, happiness index / gross national happiness, if you build it, they will come, income inequality, informal economy, Jane Jacobs, land reform, loss aversion, microcredit, Mikhail Gorbachev, mortgage debt, neoliberal agenda, new economy, North Sea oil, Northern Rock, offshore financial centre, oil shock, peak oil, pensions crisis, profit motive, purchasing power parity, quantitative easing, Ronald Reagan, seigniorage, Simon Kuznets, sovereign wealth fund, special drawing rights, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trickle-down economics, Washington Consensus, working-age population

Grameen was also about allowing people to find the investment they needed to make a major difference to people’s lives, by providing the services or food neighbours needed in the poorest places, rather than waiting hopelessly for big corporations to provide anything along the same lines. It has spawned thousands of similar micro-credit projects all over the world, one of the major ways that the first world is learning about development from the third world. Micro-credit reached its apotheosis with the UN Micro-Credit summit in 1996, hosted in Washington by Hillary Clinton. Some of the other models include: • • • Grameenphone: providing phone services in Bangladesh where they are otherwise non-existent, and redressing the anomaly that Bangladeshis who wanted a mobile had to wait ten years and pay $500, whereas New Yorkers could get one immediately, free and over the counter.

Other thinking, to underpin thriving local economies – local money flows, complementary currencies or the critique of the doctrine of comparative advantage – have barely filtered into mainstream assumptions at all, except among those creative and forward-thinking early adopters that exist in any government, however backward. The developing new economics was also informed by a range of successful initiatives to put those ideas into practice, like the pioneering Grameen Bank micro-credit operation, or the massive Seikatsu consumer co-op in Japan.16 Grameen allowed people, mainly women, to borrow very small amounts to underpin small businesses. Seikatsu allowed people to band together and buy healthier, local food wholesale, and in the end produce their own. It also soon became clear that there was a sizeable and growing minority of people who are involved in the emerging new economics paradigm in their everyday lives, and a sector is emerging to support them, providing green energy, ethical investment, community-supported agriculture and organic food.

The government responded in 2005 with reforms to credit union legislation and by setting up a Financial Inclusion Fund to tackle the problem of debt and lack of access to affordable credit. This initiative has supported about 100 credit unions and community development finance institutions to access £40 million of investment capital and revenue to provide affordable credit. Thanks to this investment, microcredit loans of over £21 million have been advanced. An extension of this programme to 2011 was agreed. Bill Clinton targeted the development of 100 community development banks. The social investment programme he implemented has borne fruit. From invisible players in 1992, by March 2007 community development credit unions (CDCUs) had attracted over 1 million low and moderate income members, were mobilizing savings of over $4 billion and were advancing new loans of over $3 billion annually.


The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good by William Easterly

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airport security, anti-communist, Asian financial crisis, bank run, banking crisis, Bretton Woods, British Empire, call centre, clean water, colonial exploitation, colonial rule, Edward Glaeser, European colonialism, failed state, farmers can use mobile phones to check market prices, George Akerlof, Hernando de Soto, income inequality, income per capita, Indoor air pollution, invisible hand, Kenneth Rogoff, laissez-faire capitalism, land reform, land tenure, microcredit, moral hazard, Naomi Klein, purchasing power parity, randomized controlled trial, Ronald Reagan, Scramble for Africa, structural adjustment programs, The Fortune at the Bottom of the Pyramid, the scientific method, The Wealth of Nations by Adam Smith, transaction costs, War on Poverty, Xiaogang Anhui farmers

Contrary to conventional wisdom at the time, he realized that the poor had a huge untapped demand for credit. He experimented, and found that microcredit borrowers would repay the loan in order to get access to future loans and also because of peer pressure from other microcredit borrowers. His first loan was to Sufiya Begum, who started a successful peddling business with the money, instead of making more bamboo stools. There was a huge demand for such loans, and Grameen Bank became the legend that it is today, with imitators from all over the world. Yunus was a Searcher. Microcredit is not a panacea for poverty reduction that some made it out to be after Yunus’s discovery. Some disillusionment with microcredit has already come in response to these blown-up expectations. Microcredit didn’t solve everything; it just solved one particular problem under one particular set of circumstances—the poor’s lack of access to credit except at usorious rates from moneylenders.

If Feroza continues to be one of Dr. Zaf’s best paramedics, she will be promoted to supervisor, with a raise to one hundred dollars a month and a scooter instead of a bicycle. Dr. Zaf searched for and found a piecemeal way to improve the lot of the Bangladeshi poor. SNAPSHOT: THE SECRET HISTORY OF GRAMEEN BANK MOHAMMAD YUNUS OF BANGLADESH, the founder of the Grameen Bank and the main inventor of microcredit schemes, didn’t start off with the goal of giving poor people credit. As Columbia University Business School professor Bill Duggan tells the story in a great book about people who find things that work, Napoleon’s Glance, Yunus started off with the conviction that the Green Revolution, and irrigation, was the answer to poverty in Bangladesh. His doctoral dissertation at Vanderbilt University was titled “Optimal Allocation of Multi-Purpose Reservoir Water: A Dynamic Programming Model.”

Financial markets refute the common perception that what you can invest in the future is limited to your own funds. You can borrow to buy land or start a small business (this works less often than it should, but much more often than if financial markets didn’t exist). The beauty of financial markets is that they make high return investments available to everyone. This idea motivates the enthusiasm for microcredit schemes that reach destitute people, such as that of the Grameen Bank in Bangladesh. Given that everyone can enter, financial markets equalize the returns (i.e., the percentage you get over and above repaying the cost of the original investment) to various types of investments across the economy. Anyone can enter any industry. If bagel stores have a high return, then many people will enter bagel retailing until they drive down the returns to normal levels.


pages: 291 words: 81,703

Average Is Over: Powering America Beyond the Age of the Great Stagnation by Tyler Cowen

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Amazon Mechanical Turk, Black Swan, brain emulation, Brownian motion, Cass Sunstein, choice architecture, complexity theory, computer age, computer vision, cosmological constant, crowdsourcing, dark matter, David Brooks, David Ricardo: comparative advantage, deliberate practice, Drosophila, en.wikipedia.org, endowment effect, epigenetics, Erik Brynjolfsson, eurozone crisis, experimental economics, Flynn Effect, Freestyle chess, full employment, future of work, game design, income inequality, industrial robot, informal economy, Isaac Newton, Khan Academy, labor-force participation, Loebner Prize, low skilled workers, manufacturing employment, Mark Zuckerberg, meta analysis, meta-analysis, microcredit, Narrative Science, Netflix Prize, Nicholas Carr, pattern recognition, Peter Thiel, randomized controlled trial, Ray Kurzweil, reshoring, Richard Florida, Richard Thaler, Ronald Reagan, Silicon Valley, Skype, statistical model, stem cell, Steve Jobs, Turing test, Tyler Cowen: Great Stagnation, upwardly mobile, Yogi Berra

It involved tens of thousands of subjects, some of whom had access to microcredit and some of whom did not. The two groups were drawn from roughly comparable neighborhoods and the goal was to compare how big a benefit microcredit really was, or not. An army of dozens of assistants helped gather data from the borrowers, both before and after they started (or did not start) the microcredit program. That included data about income, new jobs or businesses, failure to repay loans, and many other features of their daily economic lives. The basic question was a pretty simple one: whether the group with access to the microcredit did better. It turned out they were more likely to have started their own businesses and thus a classic paper was born. Most people see this as the most important study of microcredit, in addition to another large-scale randomized control trial from Dean Karlan at Yale University.

See also artificial intelligence (AI) Mechanical Turk, 148–49 mechanization, 126–27 media, 146 median incomes, 38, 52, 60, 253 Medicaid, 234–39, 250 medical diagnosis, 87–89, 128–29 Medicare, 232–35, 237–38, 242 Medication Adherence Scores, 124 Mediterranean Europe, 174–75 memory, 151–55 meritocracy, 189–90, 230–31 meta-rationality, 82, 115 meta-studies, 224–25 Mexico, 168, 171, 177, 242–43 microcredit, 222–23 microeconomics, 212, 225 “micro-intelligibility,” 219 mid-wage occupations, 38 military, 29, 57 Millennium Prize Problems, 207–8 minimum wage, 59, 60 modes of employment, 35–36 monetarist theory, 226 MOOCs (massive open online courses), 180 Moonwalking with Einstein (Foer), 152 Moore’s law, 10, 15–16 moral issues, 26, 130–31 morale in the workplace, 30, 36 Mormon Church, 197 Morphy, Paul, 106 motivation, 197–202, 203 movie ratings, 121 Moxon’s Master, 134 Mueller, Andreas, 59 multinational corporations, 164 Murray, Charles, 231, 249 music, 146–47, 158 Myspace, 42, 209 mysticism, 153 Nakamura, Hikaru, 80 Narrative Science, 8–9 natural gas production, 177 natural language, 7, 119, 140–41 Naum (chess program), 72 negotiations in business, 12–13, 73 Netflix, 9 Nevada, 8 The New York Times, 11–12 Newton, Isaac, 153 Ng, Jennifer Hwee Kwoon, 89 Nickel, Arno, 81 Nielsen, Dagh, 80 Nobel Prizes, 187, 216 non-tradeable sectors, 176 North American Free Trade Agreement (NAFTA), 8 Northeast US, 241 “nudge” concept, 105 Obama healthcare reform, 237–38 Occupy Wall Street, 230, 251, 253, 256 O’Daniel, Karrah, 96 offshoring, 175.


pages: 190 words: 61,970

Life You Can Save: Acting Now to End World Poverty by Peter Singer

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accounting loophole / creative accounting, Branko Milanovic, Cass Sunstein, clean water, experimental economics, illegal immigration, Martin Wolf, microcredit, Peter Singer: altruism, pre–internet, purchasing power parity, randomized controlled trial, Richard Thaler, Silicon Valley, Thomas Malthus, ultimatum game, union organizing

Thanks to controlled trials, we know that providing drugs to kill parasitical worms in Kenyan children improves learning, that education in condom use reduces the likelihood of people getting AIDS, and that offering mothers in India a cheap bag of lentils means that more of them will bring in their children for immunization.12 So why don’t we test all poverty programs this way? One reason is the cost of administering the trials. Oxfam America found that a random controlled trial of one of its microcredit programs in West Africa would cost almost as much as the project itself. The money would have come out of the budget for the project, with the result that microcredit could be extended to only half as many villages as would otherwise be possible. Oxfam did not go ahead with the randomized trial. This is an understandable decision, but it would probably pay, over the long term, for organizations to set aside some money specifically for proper studies of the effectiveness of their programs.

This reversed the then-accepted economic wisdom that lending to the poor carries high risks and therefore can only be economically viable if high rates of interest are charged. In 1982, when it was clear that the concept was working, Yunus founded the Grameen Bank, or “Village Bank,” to provide loans across Bangladesh. Today the Grameen Bank has more than 7 million customers in Bangladesh, and has lent more than $6 billion, with a repayment rate of 97 percent. Most important, Yunus created a model for microcredit, as it has come to be known, that has been followed by thousands of institutions all over the world. But do the loans really reduce poverty? Go to the website of a microfinance institution and you will find accounts of people who have used tiny loans to build successful businesses. The Grameen Foundation, a charity inspired by Yunus’s ideas that operates in twenty-eight countries, tells the story of Marie-Claire, a Rwandan woman who is raising four children alone.

She could have sold more, but did not have the money to buy much stock. A small loan from Opportunity International, another microfinance organization, enabled her to buy in bulk, sell more, and make higher profits. Now her business has grown so much that she employs other workers, and her family has a better home. Such stories are inspiring, but Karnofsky and Hassenfeld wanted to know how representative they are of people who receive microcredit. They read some research showing that those who get loans generally become better off, but they still needed to be convinced that the loans were responsible for the improvement. It might be the case that people who have enough initiative to get loans would become better off anyway. Then Karnofsky and Hassenfeld read a study in which researchers persuaded a South African microfinance organization to choose at random, and offer loans to, some applicants who had narrowly failed to meet the criteria for receiving a loan.


pages: 225 words: 61,388

Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa by Dambisa Moyo

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affirmative action, Asian financial crisis, Bretton Woods, colonial rule, correlation does not imply causation, credit crunch, diversification, diversified portfolio, en.wikipedia.org, European colonialism, failed state, financial innovation, financial intermediation, Hernando de Soto, income inequality, invisible hand, M-Pesa, market fundamentalism, Mexican peso crisis / tequila crisis, microcredit, moral hazard, Ponzi scheme, rent-seeking, Ronald Reagan, sovereign wealth fund, The Chicago School, trade liberalization, transaction costs, trickle-down economics, Washington Consensus, Yom Kippur War

The extension of financial services to people who otherwise have no access to banks dates as far back as when municipal savings banks began in Europe in the eighteenth century, and when German groups based on the self-help principle and called savings and credit cooperatives were first organized by Herman Schulze-Delitzsch and Friedrich Raiffeisen in the middle of the nineteenth century. In more recent times, micro-credit organizations were developed in the 1960s to serve Africa and Asia’s needs for agricultural support, yet most Africans today still have very limited access to financial markets. In Ghana and Tanzania, for example, only about 5–6 per cent of the population has access to the banking sector, although some 80 per cent of households in Tanzania would be prepared to save if they had access to appropriate products and saving mechanisms. The oldest private, worldwide, fully commercial micro-finance investment fund is the Dexia Micro-Credit Fund. It is managed by Blue Orchard Finance, a micro-finance investment consultancy, and finances some fifty micro-finance institutions in twenty-four countries.

Finally, in the twelve months to February 2008, Grameen housing loans alone have reached US$1.19 million with some 8,300 houses having been built. Since the housing programme’s inception in 1984, over 650,000 houses have been constructed. The most truly extraordinary aspect of this extraordinary tale is their ‘No Donor Money, No Loans’ policy. In 1995, Grameen Bank decided not to receive any more donor funds, and today funds itself 100 per cent through its deposits. Although recognized as the grandfather of micro-credit and micro-lending, Grameen Bank has spawned numerous variations all over the world, all targeting the segment of the population that has fallen through the high-street banking cracks. The BKI in Indonesia, Acción in Latin America, BRAC in Bangladesh and K-REP in Kenya are just a sample of the growing and expansive list. In Africa, Zambia offers an interesting case study of how microfinance has developed.

By some estimates some 10,000 organizations (from nongovernmental organizations to registered banks) today offer over US$1 billion worth of micro-finance loans annually to many millions of customers around the world; projections are that this amount will have to grow twenty-fold (to US$20 billion) over the next five years to meet projected demand. But in more extreme forecasts, some predict even more exponential growth. Vijay Mahajan, a micro-finance practitioner, puts potential annual micro-credit demand in India alone at US$30 billion, 10 per cent of the estimated global US$300 billion.4 According to an April 2006 survey by McKinsey Consulting, India has the potential to become a US$500 billion market by the year 2020. Growth in most emerging-market regions has been meteoric: For example, the Bangladeshi organization BRAC signed up 5,000 customers in Afghanistan, just six months after setting up there; two Cambodian organizations (Acleda and EMT) each have over 80,000 customers; Banco do Nordeste in Brazil has become the second-largest micro-finance operation in Latin America, with 110,000 clients in just a few years; and Compartamos, in Mexico, has nearly doubled the number of its clients in the past year to become the largest Latin American programme, with over 150,000 clients.


pages: 235 words: 62,862

Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-Hour Workweek by Rutger Bregman

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autonomous vehicles, banking crisis, Bartolomé de las Casas, Berlin Wall, Bertrand Russell: In Praise of Idleness, Branko Milanovic, cognitive dissonance, computer age, conceptual framework, credit crunch, David Graeber, Diane Coyle, Erik Brynjolfsson, everywhere but in the productivity statistics, Fall of the Berlin Wall, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Gilder, happiness index / gross national happiness, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, income inequality, invention of gunpowder, James Watt: steam engine, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, labour market flexibility, labour mobility, low skilled workers, means of production, megacity, meta analysis, meta-analysis, microcredit, minimum wage unemployment, Mont Pelerin Society, Nathan Meyer Rothschild: antibiotics, Occupy movement, offshore financial centre, Peter Thiel, post-industrial society, precariat, RAND corporation, randomized controlled trial, Ray Kurzweil, Ronald Reagan, Second Machine Age, Silicon Valley, Simon Kuznets, Skype, stem cell, Steven Pinker, telemarketer, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tyler Cowen: Great Stagnation, universal basic income, wage slave, War on Poverty, We wanted flying cars, instead we got 140 characters, wikimedia commons, women in the workforce, working poor, World Values Survey

Doing randomized controlled trials in poverty-stricken countries is difficult, time-consuming, and expensive. Often, local organizations are less than eager to cooperate, not least because they’re worried the findings will prove them ineffective. Take the case of microcredit. Development aid trends come and go, from “good governance” to “education” to the ill-fated “microcredit” at the start of this century. Microcredit’s reckoning came in the form of our old friend Esther Duflo, who set up a fatal RCT in Hyderabad, India, and demonstrated that, all the heartwarming anecdotes notwithstanding, there is no hard evidence that microcredit is effective at combating poverty and illness.13 Handing out cash works way better. As it happens, cash handouts may be the most extensively studied anti-poverty method around. RCTs across the globe have shown that over both the long and short term and on both a large and small scale, cash transfers are an extremely successful and efficient tool.14 And yet, RCTs aren’t a silver bullet.


pages: 251 words: 76,868

How to Run the World: Charting a Course to the Next Renaissance by Parag Khanna

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Albert Einstein, Asian financial crisis, back-to-the-land, bank run, blood diamonds, borderless world, BRICs, British Empire, call centre, carbon footprint, charter city, clean water, cleantech, cloud computing, corporate governance, corporate social responsibility, Deng Xiaoping, Doha Development Round, don't be evil, double entry bookkeeping, energy security, European colonialism, facts on the ground, failed state, friendly fire, global village, Google Earth, high net worth, index fund, informal economy, invisible hand, labour mobility, laissez-faire capitalism, Masdar, megacity, microcredit, mutually assured destruction, Naomi Klein, New Urbanism, offshore financial centre, oil shock, open economy, out of africa, private military company, Productivity paradox, race to the bottom, RAND corporation, reserve currency, Silicon Valley, smart grid, South China Sea, sovereign wealth fund, special economic zone, sustainable-tourism, The Fortune at the Bottom of the Pyramid, The Wisdom of Crowds, too big to fail, trade liberalization, trickle-down economics, UNCLOS, uranium enrichment, Washington Consensus, X Prize

China’s Communist Party has a massively superior capacity to care for its citizens than India’s Congress Party, but technology has enabled more than two million Indians to file electronic claims for rights to public information. In the Obama administration, the same bureaus and offices that used to issue rhetorical démarches about democracy are now focused on supporting enterprise funds that create jobs, establish public-private micro-credit programs through local banks, and use social networking technology to train journalists and encourage youth activism. This is the language of good governance and a better pathway to build democracy. Human-Rights.com Mo Ibrahim isn’t the only cellular billionaire facing down dictators. Swashbuckling Irishman Denis O’Brien made his fortune selling cell phones to more than seven million people in the most corrupt countries, including Haiti and Papua New Guinea.

Designing systems to meet the needs of these societies isn’t about revising the existing architecture but rather building a new one altogether, one focused on empowerment at the community level first and foremost. Forget stale debates about “trade versus aid.” What countries want is “aid for trade”: assistance that directly helps them ramp up their own exports. And forget nation building: Community building is nation building done right. In millions of small communities worldwide, micro-credit operations, new donors, diasporas, and social entrepreneurs are treating the causes, not just the symptoms, of social problems better than most of the world’s governments put together. They also prove the axiom that the best global governance is local governance. The global village would mean more if it helped these individual villages. Show Me the Money In 2008, twenty-five years of poverty-reduction efforts were wiped away through food and fuel price spikes.

Do we really need an “African Solidarity Fund” to help Africa? Rather than contributing to the glut of funds that don’t take necessary risks on the poor, a better plan is to constantly run experiments at the local level and scale up only what works. This is, of course, what entrepreneurs do. The Philippines, South Africa, and other countries have become the world’s liveliest laboratories for the interplay of remittances, micro-credit, FDI, bilateral donors, and new public-private partnerships—with results tracked and measured on websites such as AidData.org. Stories of success inspire replication and scale. Small models that work are far more useful than failed big ones. In Nepal, the Asian Development Bank runs a performance-based grant system: Local constituencies that spend money wisely get more as a reward. Members of the public are informed about which districts are getting what resources, so they have started to lobby hard for better local governance.


pages: 332 words: 104,587

Half the Sky: Turning Oppression Into Opportunity for Women Worldwide by Nicholas D. Kristof, Sheryl Wudunn

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agricultural Revolution, correlation does not imply causation, demographic dividend, feminist movement, Flynn Effect, illegal immigration, Mahatma Gandhi, microcredit, paper trading, rolodex, Ronald Reagan, Rosa Parks, school choice, special economic zone, transatlantic slave trade, transatlantic slave trade, women in the workforce

.: Camfed, 2004), p. 11. 182 Half of Tanzanian women: Figures for abuse by teachers in South Africa, Tanzania, and Uganda come from Ruth Levine, Cynthia Lloyd, Margaret Greene, and Caren Grown, Girls Count: A Global Investment & Action Agenda (Washington, D.C.: Center for Global Development, 2008), p. 54. CHAPTER ELEVEN Microcredit: The Financial Revolution 188 Muhammad Yunus: See Muhammad Yunus, Banker to the Poor: Micro-Lending and the Battle Against World Poverty (New York: Public Affairs, 2003); David Bornstein, The Price of a Dream: The Story of the Grameen Bank (New York: Oxford University Press, 1996); Phil Smith and Eric Thurman, A Billion Bootstraps: Microcredit, Barefoot Banking, and the Business Solution for Ending Poverty (New York: McGraw-Hill, 2007). 192 A remarkable study: Edward Miguel, “Poverty and Witch Killing,” Review of Economic Studies 72 (2005): 1153. 193 The economists Abhijit Banerjee and Esther Duflo: Abhijit V.

—CHINESE PROVERB CONTENTS INTRODUCTION The Girl Effect CHAPTER ONE Emancipating Twenty-First-Century Slaves Fighting Slavery from Seattle CHAPTER TWO Prohibition and Prostitution Rescuing Girls Is the Easy Part CHAPTER THREE Learning to Speak Up The New Abolitionists CHAPTER FOUR Rule by Rape Mukhtar’s School CHAPTER FIVE The Shame of “Honor” “Study Abroad”—in the Congo CHAPTER SIX Maternal Mortality—One Woman a Minute A Doctor Who Treats Countries, Not Patients CHAPTER SEVEN Why Do Women Die in Childbirth? Edna’s Hospital CHAPTER EIGHT Family Planning and the “God Gulf” Jane Roberts and Her 34 Million Friends CHAPTER NINE Is Islam Misogynistic? The Afghan Insurgent CHAPTER TEN Investing in Education Ann and Angeline CHAPTER ELEVEN Microcredit: The Financial Revolution A CARE Package for Goretti CHAPTER TWELVE The Axis of Equality Tears over Time Magazine CHAPTER THIRTEEN Grassroots vs. Treetops Girls Helping Girls CHAPTER FOURTEEN What You Can Do Four Steps You Can Take in the Next Ten Minutes Appendix: Organizations Supporting Women Acknowledgments Notes INTRODUCTION The Girl Effect What would men be without women?

She’s a young woman who knows something about overcoming long odds and the impact a few dollars in tuition assistance can make in a girl’s life. It’s Angeline. * Larry Summers offers an example to emphasize the distinction between correlation and causation. He notes that there is an almost perfect correlation between literacy and ownership of dictionaries. But handing out more dictionaries will not raise literacy. CHAPTER ELEVEN Microcredit: The Financial Revolution It is impossible to realize our goals while discriminating against half the human race. As study after study has taught us, there is no tool for development more effective than the empowerment of women. —KOFI ANNAN, THEN UN SECRETARY-GENERAL, 2006 Saima Muhammad would dissolve into tears every evening. She was desperately poor, and her deadbeat husband was unemployed and not particularly employable.


What We Say Goes: Conversations on U.S. Power in a Changing World by Noam Chomsky, David Barsamian

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banking crisis, British Empire, Doomsday Clock, failed state, feminist movement, Howard Zinn, informal economy, microcredit, Mikhail Gorbachev, Monroe Doctrine, oil shale / tar sands, peak oil, RAND corporation, Ronald Reagan, Thomas L Friedman, union organizing, Upton Sinclair, uranium enrichment, Washington Consensus

Domestic Mexican businesses would not be able to compete with U.S. multinationals, which receive special treatment in Mexico under mislabeled trade laws that have little to do with trade but are about ensuring investor rights. The result would be a flood of people north into the United States, joined by a flood of people leaving the ruins of Central America after Reagan’s terrorist wars. So, you build a wall. Muhammad Yunus of Bangladesh was awarded the 2006 Nobel Peace Prize.14 He started the Grameen Bank in that country. It’s based on microcredit loans to mostly poor women in rural areas. People are always asked, if you don’t like capitalism, what about some kind of alternative? Is this perhaps the basis of an alternative? It’s a sensible device. It’s not the answer to everything. Empowering women is extremely important in third world countries—actually, in most communities. One of the things that is very noticeable in communities that have been crushed and are barely surviving is that the women seem much more able to do things than men are.

One of the things that is very noticeable in communities that have been crushed and are barely surviving is that the women seem much more able to do things than men are. And you can see why. The women’s responsibilities continue no matter how rotten the situation. They’re still taking care of the children, doing all the housework, cooking. Often men, when their usual opportunities are gone, are lost. They have nothing to do. They turn to drink, to crime. You see it all over the place. So giving microcredit loans to women is a very smart thing to do. It’s not the end of everything, but it has paid off. It’s a good capitalist approach. This is pure capitalism, actually, much purer than the U.S. economy. It’s real capitalism. The U.S. economy is state-based to a large extent. The current pope, Benedict XVI, who has managed to mire himself in controversy around his statements about Islam, was known as the enforcer during the reign of the much revered and hallowed Pope John Paul II.15 He was the guy who apparently purged high-ranking Catholic officials who supported liberation theology.

The article notes, “Costa Rica has led the region in renewable energy, with 90 percent of its electricity from hydroelectric, geothermal and wind-powered generators, according to Carlos Manuel Rodriguez, Costa Rica’s energy and environment minister.” 11 See Oscar Olivera and Tom Lewis, ¡Cochabamba! Water War in Bolivia (Cambridge: South End Press, 2004). 12 Simon Romero, “Early Returns Point to a Presidential Runoff in Ecuador,” New York Times, 16 October 2006. 13 Adam Thomson, “Fury Builds in Mexico as Defeated Side Cries Fraud,” Financial Times, 8 July 2006. 14 Molly Moore, “Micro-Credit Pioneer Wins Peace Prize,” Washington Post, 14 October 2006. 15 Pope Benedict XVI called Islam “evil and inhuman.” Ian Fisher, “Pope Calls West Divorced from Faith, Adding a Blunt Footnote on Jihad,” New York Times, 13 September 2006. 16 Nikolai Lanine, “We’re Still Dying in Afghanistan,” Globe and Mail (Toronto), 30 November 2006. 17 Walter Pincus, “Mueller Outlines Origin, Funding of Sept. 11 Plot,” Washington Post, 6 June 2002. 18 Karen DeYoung, “Allies Are Cautious on ‘Bush Doctrine,’” Washington Post, 16 October 2001. 19 See Abdul Haq, “US Bombs Are Boosting the Taliban,” Guardian (London), 2 November 2001.


pages: 423 words: 149,033

The fortune at the bottom of the pyramid by C. K. Prahalad

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barriers to entry, business process, call centre, cashless society, clean water, collective bargaining, corporate social responsibility, deskilling, disintermediation, farmers can use mobile phones to check market prices, financial intermediation, Hernando de Soto, hiring and firing, income inequality, late fees, Mahatma Gandhi, market fragmentation, microcredit, new economy, profit motive, purchasing power parity, rent-seeking, shareholder value, The Fortune at the Bottom of the Pyramid, time value of money, transaction costs, working poor

Also, women are more likely to respond to the pressure of the social collateral, which many of the MFIs depend on for repayment. The world of MFIs is diverse—they exist in various legal forms, including nongovernmental organizations (NGOs), credit unions, nonbank financial intermediaries, and commercial banks. In the most recent meeting of the MicroCredit Summit in November 2002, there were more than 2,100 MFI entities in various forms that provided information on loans to more than 54 million clients. Their success has shown that poor people can be valuable clients of specially designed financial services. In 1997, the Micro-Credit Summit was formed to exchange ideas and start a global campaign dedicated to reaching 100 million of the world’s poorest families by 2005. Worldwide, there are more than 7,000 MFIs. Of these, fewer than 100 claim financial self-sufficiency. Each type of MFI faces unique constraints that prohibit its financial sustainability.

The Bank of Madura was especially strong in small- and medium-sized corporate banking, which would help ICICI expand its corporate business. An additional strength was the Bank of Madura’s microfinance initiative. ICICI made it clear it intended to aggressively develop this initiative. P. H. Ravikumar, Senior Executive Vice President of ICICI Bank, stated that in “the area of micro-credit lending they also have a strong presence, especially in those areas where the lending is to self-help groups involved with handicrafts, weaving, etc. We will evaluate the micro-credit areas and wherever possible will try to grow them.”25 The merger was approved on March 10, 2001, by the RBI. With the merger, ICICI Bank Limited became one of India’s largest private-sector banks with total deposits of Rs. 13,460 crores. After the merger, ICICI became the most visible bank in the state of Tamil Nadu with activity in 23 of the 28 districts.

For comparison, the State Bank of India, one of the oldest and largest banks in the country, had to financially support a network of more than 13,000 branches.19 As ICICI oriented the banking operations toward the BOP (see Figure 3), it began looking at entering the microfinance field because there certainly was and still is a vast unmet demand for credit in rural areas. “In rural areas, only one million households have received access to microcredit from MFIs.”20 Yet the competitive situation was relatively crowded. “India currently boasts more than 500 microfinance institutions.”21 However, the incumbents in this space were all struggling to turn profits because they were used to working as donorfunded and supported institutions. This dependence often affects scalability and sustainability. Additionally, these MFIs were experiencing low savings to credit ratios, liquidity problems, high capacity-building costs and general The Fortune at the Bottom of the Pyramid 296 Represents value loss = Supply focus of MNCs = Economic pyramid Represents value opportunity Figure 3 Value opportunity and value loss.


pages: 358 words: 106,729

Fault Lines: How Hidden Fractures Still Threaten the World Economy by Raghuram Rajan

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accounting loophole / creative accounting, Andrei Shleifer, Asian financial crisis, asset-backed security, bank run, barriers to entry, Bernie Madoff, Bretton Woods, business climate, Clayton Christensen, clean water, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, diversification, Edward Glaeser, financial innovation, floating exchange rates, full employment, global supply chain, Goldman Sachs: Vampire Squid, illegal immigration, implied volatility, income inequality, index fund, interest rate swap, Joseph Schumpeter, Kenneth Rogoff, knowledge worker, labor-force participation, Long Term Capital Management, market bubble, Martin Wolf, medical malpractice, microcredit, moral hazard, new economy, Northern Rock, offshore financial centre, open economy, price stability, profit motive, Real Time Gross Settlement, Richard Florida, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, school vouchers, short selling, sovereign wealth fund, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, upwardly mobile, Vanguard fund, women in the workforce, World Values Survey

Although home ownership rates did go up—from 64.2 percent of households in 1994 to 69.2 percent in 2004—too many households that could not afford to borrow were induced to do so, and since 2004, even home ownership has declined steadily (to 67.2 percent as of the fourth quarter of 2009), with the rate likely to fall further as many households face foreclosure.52 This is a lesson that needs to be more widely absorbed. Few “solutions” hold more support and promise up front, and lead to more recrimination after the fact, than opening the spigot of lending. For poor countries there is a strong parallel with the past enthusiasm for foreign aid. Now we know that aid leads to dependency, indebtedness, and poor governance and rarely leads to growth.53 The new miracle solution is microcredit—lending to the poor through group loans, a system in which peer pressure from the group makes individuals more likely to repay. Although it has promise on a small scale, history suggests that when scaled up, and especially when used as an instrument of government policy, it will likely create significant problems. So what should the United States do to deal with the waning of the American dream, with the shrinking of opportunities for the large mass of the American people?

The second way the Fund overreached was in setting conditions, often dictated by its major shareholders such as the United States, that attempted to reform the East Asian countries according to Western notions of governance. For instance, Indonesia was asked to undertake 140 or so actions in 1998, including disbanding the clove monopoly, strengthening reforestation programs, and introducing a microcredit scheme. To the cynic—and cynics were sometimes correct—these moves were really intended to open up large protected segments of the country to Western firms and advocacy groups. Although some of these measures may have benefited the country in the long run, these were decisions for the people themselves to take, not for foreign officials to require when the country was flat on its back. The unfortunate photo of the IMF managing director, Michel Camdessus, with his arms crossed and towering over a seemingly cowed President Suharto of Indonesia as he signed the IMF agreement suggested an image of the conqueror accepting the unconditional surrender of the defeated.10 Although the true circumstances were more benign, the photo compounded the sense that this was a new form of financial colonialism.

See higher education Community Reinvestment Act (CRA) conglomerates consumption: in China in developing countries discouragement of of energy excess in Japan of middle class political pressure for economic stimulus to in United States contingent capital corruption CRA. See Community Reinvestment Act credit: benefits and costs of easy definition of democratization of credit card debt credit default swaps credit markets: access to in developing countries expansion of government intervention in informal microcredit political pressure for easy credit See also subprime mortgage market credit ratings, of mortgage-backed securities crises. See financial crises crony capitalism currencies. See exchange-rate policies current-account balances debt: consumer government household negative views of,See also credit markets; foreign debt; mortgages Defoe, Daniel, A Plan of the English Commerce demand: in housing market interest rate levels and in United States, See also consumption democracies democratization of credit Dennis, William deposit insurance deregulation developing countries: central banks of consumption in current-account surpluses of economic growth of excess savings of exchange-rate policies of, financial systems of foreign debt of foreign exchange reserves of foreign investment in microcredit in organizational capital in poverty in trade deficits of trade surpluses of Dimon, Jamie disability payments dot-com bubble Douthat, Ross early developers earthquake, Haitian earthquake insurance East Asia.


pages: 340 words: 91,387

Stealth of Nations by Robert Neuwirth

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accounting loophole / creative accounting, big-box store, British Empire, call centre, collective bargaining, corporate governance, full employment, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Jane Jacobs, jitney, joint-stock company, Joseph Schumpeter, megacity, microcredit, New Urbanism, pirate software, profit motive, Shenzhen was a fishing village, Simon Kuznets, special economic zone, The Wealth of Nations by Adam Smith, thinkpad, upwardly mobile

And even if he could jump those hurdles, the interest the bank would charge on the loan—most likely greater than 20 percent—would make the infusion of cash far too expensive. At the same time, microcredit, which many in the West point to as a solution for the needs of small-scale merchants throughout the world, won’t help either. A subsistence microloan from a local bank, or through a Web-based entity like Kiva, which allows people in the West to support small-scale entrepreneurialism, is a valuable approach for the lowest tier of businesspeople (sadly, though, the combination of fees and interest charged on microloans are often higher than what is normally charged by banks). But Right Time Investments needs a bigger boost than the largest microcredit outfits can offer. Essentially, Andrew’s business is too micro for macrocredit and too macro for microcredit. Despite the impediments, Andrew refuses to be despondent. He believes Lagos will open itself to those who are committed and diligent.

Customers also avoided making the lengthy trip to Panguila, the new location, and traders report a steep decline in business. “There are no customers,” a vendor told Agence France-Presse. “Before people could come to buy pants, or a CD. Now they aren’t going to spend 1,000 kwanzas [close to $11] on transport to come to Panguila.” In fact, business is so bad at the new market that Angola’s leading microcredit bank has determined that it will no longer make loans to the merchants there. And the final sad fact is that the city has announced nothing about how it intends to redevelop the central site where the market used to be. Similarly, when a new market was built a few years back in Nairobi, Kenya, national and local officials trumpeted it as a terrific plan to move all street hawkers off the downtown streets.

., System D income in, 8.1 Los Angeles Economy Project, 8.1 Luanda, Angola, System D crackdown in, 10.1 Luden’s, 12.1 lumpenproletariat, 9.1 Luther, Martin, 8.1, 8.2 machine industry, 3.1, 4.1 Mafia, 5.1, 9.1, 12.1 Maker Faire Africa, 12.1 Ma Laboratories, 11.1 Man, Economy, and State (Rothbard), 9.1 Mandeville, Bernard, 5.1–5.2, 5.3–5.4, 9.1 Márcio, 1.1, 1.2, 1.3, 1.4, 1.5 Martin, Mariano, 7.1, 7.2, 7.3, 7.4 Marx, Karl, 9.1 Matilde, 8.1–8.2 Maxwell Street Market, 8.1–8.2 Mayhew, Henry, 2.1–2.2, 3.1, 3.2 Meagher, Kate, 12.1 megacity, 2.1, 10.1 melamine, 12.1 mercantilism, 8.1 Mercosur treaty, 11.1, 11.2 Mexico U.S. immigrants from, 8.1, 8.2, 8.3, 8.4–8.5 U.S. smuggling from, 6.1–6.2 water shortage in, 7.1 Miami, Fla., System D income in, 8.1–8.2 Miami Herald, 12.1 microcredit, 3.1 Microsoft, 3.1, 5.1 Middle East, street peddling in, 1.1 milk of magnesia, 12.1 minimum wage, 1.1, 3.1, 3.2, 3.3 Miranda, Emily, 8.1–8.2 Mission Minis, 8.1–8.2 mobile phone industry airtime selling in, 7.1–7.2 Chinese retailing in, 6.1 in developing world, 9.1 illegal dumping in, 12.1–12.2 in Nigeria, 3.1, 3.2, 7.1–7.2, 12.1 piracy in, 5.1, 5.2–5.3 street sales in, 3.1, 3.2 unlocking in, 3.1, 8.1 “Modern Prince, The” (Gramsci), 2.1 molue, see bus system, Lagos Monalisa, 12.1, 12.2 money laundering, 12.1, 12.2 Montoya, Martín, 10.1 moonlighting, 2.1, 8.1 Morales, Alfonso, 8.1–8.2, 12.1 Morales, Evo, 12.1 Morocco, retailing in, 7.1–7.2 motorcycle taxis, 3.1–3.2, 6.1, 6.2, 10.1–10.2 see also okada Movimento Nacional dos Catadores de Materiais Recicláveis (MNCR), 12.1 MTN, 7.1–7.2, 12.1 Musa, Yusuf, 3.1, 3.2–3.3, 3.4 music industry, piracy in, 1.1, 5.1–5.2, 5.3–5.4, 6.1 Mwangi, David, 4.1 Mystery of Capital, The (de Soto), 11.1 Nairobi, Kenya, System D crackdown in, 10.1–10.2 National Agency for Food and Drug Administration and Control (NAFDAC), 12.1, 12.2 National Union of Road Transport Workers (NURTW), 3.1, 3.2 Nepal, System D in, 12.1–12.2 New York, N.Y.


Crisis and Dollarization in Ecuador: Stability, Growth, and Social Equity by Paul Ely Beckerman, Andrés Solimano

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banking crisis, banks create money, barriers to entry, capital controls, Carmen Reinhart, carried interest, central bank independence, centre right, clean water, currency peg, declining real wages, disintermediation, financial intermediation, floating exchange rates, Gini coefficient, income inequality, income per capita, labor-force participation, land reform, London Interbank Offered Rate, Mexican peso crisis / tequila crisis, microcredit, money: store of value / unit of account / medium of exchange, offshore financial centre, open economy, pension reform, price stability, rent-seeking, school vouchers, seigniorage, trade liberalization, women in the workforce

As analyzed earlier, its targeting is not closely tied to the Bono Solidario, although its intended effects could in part duplicate the observed positive impact of the Bono Solidario in terms of raising school attendance. Another complement to the Bono Solidario is a microcredit program to be introduced in 2002. This program is targeted at beneficiaries of the Bono Solidario and other extremely poor beneficiaries to be selected through the SELBEN information system. These credits should support the development of household firms and thus the income-earning capacity of the poor. Credits are to be supplied through a new network of financial intermediaries. It is hoped the microcredit scheme will induce increases in productive investment and, over time, reduce dependence of beneficiary families on the Bono Solidario. The projected program size (84,000 bene- ECUADOR: CRISIS, POVERTY, AND SOCIAL PROTECTION 163 ficiary households by 2004), is relatively small, however, and will provide access to credits to less than 10 percent of Bono Solidario beneficiaries.

The Employment Plan 2001–2006 envisages a broad range of actions, partly building on the institutional infrastructure of existing programs to be used for expanding public employment in the short run (CIE 2001). A special interministerial committee was set up in early 2001 to coordinate actions to enhance employment creation through existing public invest- 162 CRISIS AND DOLLARIZATION IN ECUADOR ment plans in infrastructure (roads, housing, FISE), as well as through several new schemes of microcredits and vocational training. 6. Future Prospects A government strategy to offset the effects of the crisis would need three basic components: (a) protection of basic and targeted public services, (b) income or consumption support for vulnerable groups, and (c) new or expanded programs to prevent the crisis from doing permanent and irreparable harm to the poor. Elements of a social-protection strategy already exist in Ecuador.

If implemented, these various programs could generate as many as 28,000 temporary new jobs annually. Ecuador’s experience to date with the FISE, however, indicates that reaching this target might be difficult (Vos and others 2000) The government opted in 2001 for a more comprehensive approach to employment generation through public investment programs, social housing projects, the FISE, as well as through microcredits to small enterprises and the enhancement of vocational training programs. Much of this Employment Plan (see section 5) will be embedded in existing or planned actions, but will be coordinated by an Interministerial Commission for Employment with the involvement of local governments and NGOs. The plan envisages generating a total of 2 million new and improved jobs between 2001 and 2006 at a total budget of US$524 million.


pages: 300 words: 78,475

Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream by Arianna Huffington

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American Society of Civil Engineers: Report Card, Bernie Madoff, Bernie Sanders, call centre, carried interest, citizen journalism, clean water, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, David Brooks, extreme commuting, Exxon Valdez, full employment, greed is good, housing crisis, immigration reform, invisible hand, knowledge economy, laissez-faire capitalism, late fees, market bubble, market fundamentalism, Martin Wolf, medical bankruptcy, microcredit, new economy, New Journalism, offshore financial centre, Ponzi scheme, Report Card for America’s Infrastructure, Richard Florida, Ronald Reagan, Rosa Parks, single-payer health, smart grid, The Wealth of Nations by Adam Smith, too big to fail, transcontinental railway, trickle-down economics, winner-take-all economy, working poor, Works Progress Administration

., “Letter from a Birmingham Jail,” www.africa.upenn.edu. 149 Conservative commentator Tony Blankley: Left, Right and Center, 15 Jan. 2010, www.kcrw.com. 150 As America’s Misery Index soars: www.miseryindex.us. 151 “We have to lean on one another …”: Barack Obama, eulogy for West Virginia Miners, 25 Apr. 2010, www.whitehouse.gov. 152 David Brooks has written about the need: David Brooks, “The Broken Society,” 18 Mar. 2010, www.nytimes.com. 153 “Volunteering, especially among professional classes and the young”: Philip Blond “Cameron’s ‘Big Society,’ ” 25 Apr. 2010, www.guardian.co.uk. 154 In 2002 in San Francisco’s Mission district: “About 826,” www.826valencia.org. 155 In Brooklyn, New York, FEAST: Danny LaChance, “An Idea Grows in Brooklyn,” University of Minnesota Alumni Association, spring 2010, www.minnesotaalumni.org. 156 Matthew Bishop, U.S. business editor for the Economist: Howard Davies, “A New Take on Giving,” 10 Jan. 2009, www.guardian.co.uk. 157 Social entrepreneurs pinpoint social problems: Caroline Hsu, “Entrepreneur for Social Change,” 31 Oct. 2005, www.usnews.com. 158 Providing microcredit to small businesses: Devin Leonard, “Microcredit? To Him, It’s Only a Start,” 30 Apr. 2010, www.nytimes.com. 159 In 2008, Yunus’s Grameen bank opened a branch in New York: “About Us,” www.grameenamerica.com. 160 In 2010 it opened a branch in Omaha, Nebraska: “Grameen America Celebrates Grand Opening of Omaha Branch,” 24 Feb. 2010, www.grameenamerica.com. 161 The Grameen Bank’s slogan: “Banking for the unbanked”: Emily Belz, “Recession-Proof Banking?”

Matthew Bishop, U.S. business editor for the Economist, in his book Philanthrocapitalism, explored how this moment of crisis for capitalism and philanthropy could be used to transform both—how capitalism could be imbued with a social mission, and philanthropy could be reinvigorated with the best practices of capitalism.156 And in seeking to blend the efficiency of enterprise with the benefits of philanthropy, the burgeoning social entrepreneurship movement does precisely that. Social entrepreneurs pinpoint social problems and, rather than waiting for government action, apply market principles to solve them in original ways.157 Supported by investment funds from organizations such as Echoing Green, Ashoka, and Investors’ Circle, trailblazing social ventures are reenvisioning the way social change happens, not only abroad, but here at home, too. Providing microcredit to small businesses is an innovation for which Muhammad Yunus won the Nobel Peace Prize in 2006.158 In 2008, Yunus’s Grameen Bank opened a branch in New York.159 In 2010 it opened a branch in Omaha, Nebraska.160 The Grameen Bank’s slogan: “Banking for the unbanked.”161 Hoping to serve one million American entrepreneurs, Grameen America plans to expand into more than fifty cities across the country, including Washington, D.C., and San Francisco.162 A practice most closely associated with helping struggling Third World countries has now arrived in America.

., and San Francisco.162 A practice most closely associated with helping struggling Third World countries has now arrived in America. By February 2010, the New York branch had extended loans to 2,500 clients, mostly women. The average loan amount is $1,500 (no collateral necessary) and more than 99 percent of the recipients make their payments on time.163 Grameen Bank is not the only organization committed to providing microcredit to small businesses here at home. Since 1991, ACCION USA has lent over $119 million, in the form of more than 19,500 small-business loans, to low- and moderate-income entrepreneurs.164 Luis Zapeda Alvarez, for example, who was once homeless and out of work, now runs his own business delivering baked goods to New York City restaurants and delis—in large part due to the assistance he received.165 After banks refused to lend him start-up capital, Alvarez approached ACCION and borrowed enough money to buy the delivery truck he needed to get his business off the ground.


Rethinking Money: How New Currencies Turn Scarcity Into Prosperity by Bernard Lietaer, Jacqui Dunne

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3D printing, agricultural Revolution, Albert Einstein, Asian financial crisis, banking crisis, Berlin Wall, BRICs, business climate, business process, butterfly effect, carbon footprint, Carmen Reinhart, clockwork universe, collapse of Lehman Brothers, complexity theory, conceptual framework, credit crunch, discounted cash flows, en.wikipedia.org, Fall of the Berlin Wall, fear of failure, fiat currency, financial innovation, Fractional reserve banking, full employment, German hyperinflation, happiness index / gross national happiness, job satisfaction, Marshall McLuhan, microcredit, mobile money, money: store of value / unit of account / medium of exchange, more computing power than Apollo, new economy, Occupy movement, price stability, reserve currency, Silicon Valley, the payments system, too big to fail, transaction costs, trickle-down economics, urban decay, War on Poverty, working poor

in the Basque region in northern Spain. Its annual revenue is 32 billion euros.17 Henk Van Arkel of STRO recalled the early days of the system in the Palmeira settlement: “We put aside the money for building a school in Fortaleza, Brazil. We asked the donor, the Dutch NGO ICCO, to be  patient. The school would get built, but instead we planned to first put local currency, called fomentos, in circulation in the form of microcredits backed by the donor money in the bank. At the start, nobody knew what fomentos were, but the Banco Palmas reps asked people, mostly vendors, who were getting these loans to put signs in their windows saying, ‘Fomentos accepted here.’ Notices were very quickly all over the place. Then Banco Palmas went to builders and asked them to accept payment in fomentos. By then, it seemed that fomentos could be spent everywhere in the neighborhood, so they agreed.

In 2005, the Brazilian government’s Secretary for Solidarity Economy created a partnership with the Instituto Palmas. Support for “community development banks” issuing new currency is now official state policy. In 2006, Banco Popular do Brazil, the largest public bank in the country, became a partner of the Brazilian Network of Community Development Banks (CDB), a guarantor of credit lines based on the criteria from PMNPO (National Program of Oriented Productive Microcredit). The CDB estimates that this microloan program had an impact on the lives of more than 200,000 people. There are currently 78 community banks. Banco Palmas has created over 1,800 jobs and sparked the creation of similar dual currency banking already operational now in some 66 communities around Brazil with the full support of the Brazilian government and the nation’s Central Bank. 108 PROSPERITY FROM HUMBLE BEGINNINGS Aurineide Alves Cordeiro, a resident of Conjunto Palmeira, asked for her first loan of less than $100 more than 14 years ago.

Organized and run for more than the last two decades by Henk Van Arkel, STRO grew out of the publishing company he and his brother ran with an editorial focus on environmental and social issues. Using money from a Dutch government program, he was able to hire full-time and part-time employees to research currency models following STRO’s early adventures into implementing LETS systems in the Low Countries. Keenly aware that business is the backbone of any community, Van Arkel focused on the successes in South and Central America of microcredit lending and started to look for new designs and models. Van Arkel remembers, “We started with the relations we had at the time. The manager that we had in Porto Allegre, Brazil, was a former director of the UN small enterprise program. Prior to working with us, he had initiated a program in Uruguay and introduced IT and new technologies and other innovations. It turned out to be a very successful project that led to Uruguay being one of the most advanced countries in that business.”6 Van Arkel and he together designed a currency that would address the critical issue of cash flow facing small and medium-size enterprises when their suppliers extend credit for 30 days while their larger customers may not pay for 90 days.


words: 49,604

The Weightless World: Strategies for Managing the Digital Economy by Diane Coyle

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barriers to entry, Berlin Wall, Big bang: deregulation of the City of London, blue-collar work, Bretton Woods, clean water, computer age, Corn Laws, cross-subsidies, David Ricardo: comparative advantage, dematerialisation, Diane Coyle, Edward Glaeser, everywhere but in the productivity statistics, financial deregulation, full employment, global village, hiring and firing, Howard Rheingold, income inequality, informal economy, invisible hand, Jane Jacobs, Joseph Schumpeter, knowledge economy, labour market flexibility, laissez-faire capitalism, lump of labour, Marshall McLuhan, McJob, microcredit, Network effects, new economy, Nick Leeson, night-watchman state, North Sea oil, offshore financial centre, pension reform, pensions crisis, Ronald Reagan, Silicon Valley, spinning jenny, The Death and Life of Great American Cities, the market place, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tobin tax, two tier labour market, very high income, War on Poverty, winner-take-all economy, working-age population

Even those who seemingly have no conceptual thought, no ability to think of yesterday or tomorrow, are in fact quite intelligent and expert at the art of survival. Credit is the key that unlocks their humanity.’ From these small beginnings, microcredit has been given the seal of approval by the World Bank, which had itself made $200 million available for tiny loans in developing countries by the end of 1995. World Bank figures put the amount of such loans in Bangladesh alone at $520 million by that time, involving 4.8 million borrowers. By the end of 1996 it estimated that there were more than 7000 microcredit programmes serving 16 million people in developing countries with loans worth $2.5 billion. Almost none of the funds came from government sources. In the light of this success it is not surprising that projects involving microcredit in the developed world should have started to spring up. They are seen as an extension of well-established social investment programmes.

He goes on: ‘Localised approaches to work creation should be set within, rather than apart from, broader spheres of economic activity — the aim being greater self-reliance rather than autarchy’.19 Lets offer one means of growing the third sector without an infusion of The Weightless World 78 public funds. It is one of many possible forms in which there can be meaningful activity and work in an increasingly weightless economy where many traditional job opportunities are vanishing. Local financing Another approach is one born of an astonishingly successful initiative in the developing world known as microcredit. The vision of one man, Muhammad Yunus, who founded Bangladesh’s Grameen Bank has grown into a worldwide lending network amounting to hundreds of millions of dollars — all in loans of no more than a few thousand dollars each and often far less than that. Yunus, an economist, founded Grameen in the mid-1970s when he was head of the economics department at Chittagong University. In 1974 Bangladesh suffered a terrible famine.


pages: 406 words: 113,841

The American Way of Poverty: How the Other Half Still Lives by Sasha Abramsky

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2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, bank run, big-box store, collective bargaining, deindustrialization, Francis Fukuyama: the end of history, full employment, ghettoisation, Gini coefficient, housing crisis, illegal immigration, immigration reform, income inequality, indoor plumbing, job automation, Mark Zuckerberg, Maui Hawaii, microcredit, mortgage debt, mortgage tax deduction, new economy, Occupy movement, offshore financial centre, payday loans, Plutocrats, plutocrats, Ponzi scheme, Potemkin village, profit motive, Ronald Reagan, school vouchers, upwardly mobile, War on Poverty, Washington Consensus, women in the workforce, working poor, working-age population, Works Progress Administration

Had she had a guaranteed income years earlier, however, she wouldn’t have been stuck in a violent, abusive situation for as long as she was. She would have had the means to move much sooner, to start the next stage of her life without worrying that her kids would be out on the street. WHEN SMALLER IS BETTER Beyond the guaranteed income, state governments should also experiment more with state-backed micro-credit lending for low-income communities. Such lending seeds startup businesses in much of the developing world, yet, despite its documented success in raising numbers of borrowers out of poverty in countries such as Bangladesh, there has been a paucity of it within the United States. Yes, the Small Business Administration provides low-interest, long-term loans to organizations such as the Milwaukee-based Wisconsin Women’s Business Initiative (WWBI), which then leverage that money to raise additional low-interest loans from private banks, which can then be turned around and loaned at a slightly higher rate of interest to poor Americans looking to start their own companies.

The Aspen Institute’s FIELD program estimated that nationwide in the years leading up to 2012 only around 117,000 such loans were disbursed annually.7 Given that there were more than 20 million micro-businesses in the country, and given the fact that small businesses in the post-2008 environment too often were denied credit by banks, that wasn’t nearly enough. Why not use some of the revenues raised from a financial transactions tax to put the federal government directly into the micro-loan business? Why not open up these loans to employees wanting to buy out retiring company owners and create worker-owned cooperatives? Why not, asked Wendy Baumann, executive director of WWBI, create a national micro-credit lending pool into which the government, as well as private banks, could contribute? In 2008 and 2009, such contributions could have been one of the conditions upon which the feds provided banks with bailout money. These days, such contributions could be one of the requirements for banks wanting the umbrella of FDIC insurance. Owing to the desperate nature of the times, said Baumann—whose organization lent small amounts of money for a few years at a time, and 95 percent of whose clients met the terms of their loan—in an era of high unemployment and obliterated retirement nest eggs, increasing numbers of people were asking to borrow limited pots of cash to start their own businesses.

See Aid to Families with Dependent Children Affordable Care Act, 224, 298 African Americans, 9–10, 25, 81, 128–129, 129–130, 186 and education, 26 and housing, 172–173 and Hurricane Katrina, 155–156 Agassi, Andre, 276 Aid to Families with Dependent Children (AFDC), 45, 107, 216–217, 218, 232 Alabama, 103, 106, 131, 289 Alaska, 251 Albelda, Randy, 206, 218, 233 Alfond, Harold, 256–257 American Airlines, 312 American Bankers Association conference (Chicago, 2009), 36 American Legislative Exchange Council, 178, 179, 205 American Recovery and Reinvestment Act, 100, 110, 218, 278 Anti-poverty strategies, 197–198, 199–205 and automatic stabilizers, 231–232 and automatic triggers/coordinated efforts, 228–229 and benefit corporations, 310–311 and community building, 308–309, 309–312 and disability insurance, 304–306 and domestic workers, 297–298 and Earned Income Tax Credit, 233, 287–294, 295–296, 299–300, 300–301 and economic downturns, 218–220 and education, 274–283 and existing programs, 287–317 and food stamp program, 220–223, 232 and green jobs and industries, 264–266 holistic approach to, 229–231 and homelessness, 269–270, 283–284 and housing, 266–269, 283–284 and income guarantee, 294–297 and infrastructure, public and private, 263–264 and job training/retraining programs, 305–306, 306–310 and living wage, 295–296, 297, 298–299, 305 and Medicaid, 224–227 and Medicare, 311, 314–315, 316 and minimum wage, 297, 299–300, 305 and mortgage foreclosures, 270–274 and pensions, 311–313, 313–315 and public works programs, 301–304 punishment-based vs. incentive-based approach to, 233, 234 and school meals, 223–224 and Social Security, 311, 313–315, 315–316, 316–317 and state banks, 263–266 and taxes, 263, 264, 266, 298–300 and unions, 297–298 and will to reform, 227–229, 326–327 See also Poverty; War on Poverty Appalachia, 54, 131–132 Appalachian Pennsylvania, 18–20 Appalachian Regional Development Act, 202 Arizona, 91, 106, 300 Arkansas, 106, 107 As Texas Goes (Collins), 179 Asian Americans, 24–25, 26 Aspen Institute, FIELD program, 254 Atlanta, 103, 229 Attwell, Steven, 302–303, 305 Automatic stabilizers, 121, 218, 231–232 Automatic triggers/coordinated efforts, 228–229 Autor, David, 304 Bachmann, Michele, 119–120 Bacon, Pastor Ed, 230–231 Baker, Dean, 244–247 Bankruptcy, 56, 57–58, 175, 312–313 Banks/bankers, 36, 58–59. See also Micro-credit lending; Mortgage foreclosures; State banks Barbour, Haley, 120 Barry, Artensia, 171–172 Bartholow, Jessica, 98, 99, 120, 218–219, 223 Baumann, Wendy, 254–255 BCC credit union. See Boston Community Capital credit union Beck, Glenn, 92 Benefit corporations, 310–311 Bernanke, Ben, 165 Bethlehem Steel, 312 Bing, David, 185 Bismarck, Otto von, 71 Blaming the poor, 8, 44, 58, 61, 119 Blockett, Nekedra, 151–153 Bloomberg, Michael, 108 Boehner, John, 119 Boeing, 83 Booker, Alicia, 109, 110 Booth, Charles, 65 Boston, 173, 271–273 Boston Community Capital (BCC) credit union, 271–272 Brady, Diane, 102 Brazil, 251 Brown, Jerry, 218 Buchanan, Pat, 37–138 Buckley, William, 290 Budget deficit, 39–40, 47–48, 99, 119–122, 198 Buffett, Warren, 4, 39, 244 Burke, Robert, 184 Bush, George H.


pages: 232

Planet of Slums by Mike Davis

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barriers to entry, Branko Milanovic, Bretton Woods, British Empire, Brownian motion, centre right, clean water, conceptual framework, crony capitalism, declining real wages, deindustrialization, Deng Xiaoping, edge city, European colonialism, failed state, Gini coefficient, Hernando de Soto, housing crisis, illegal immigration, income inequality, informal economy, Internet Archive, jitney, Kibera, labor-force participation, land reform, land tenure, low-wage service sector, mandelbrot fractal, market bubble, megacity, microcredit, New Urbanism, Ponzi scheme, RAND corporation, rent control, structural adjustment programs, surplus humans, upwardly mobile, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor

Seventh, under such conditions, it is not surprising that initiatives such as micro-credit and cooperative lending, while helpful to those informal enterprises managing to Wead water, have had little macro impact on the reduction of poverty, even in Dhaka, the home of the world-famous Grameen Bank.34 Indeed, stubborn belief in "leveraging the micro-enterprise," writes Jaime Joseph, a veteran community 32 Clifford Geertz, Agricultural Involution: The Processes of Ecological Change in Indonesia, Berkeley 1963, pp. 80-82. T. McGhee uses the "urban involution" metaphor in "Beachheads and Enclaves: The Urban Debate and the Urbanization Process in Southeast Asia since 1945," in Y. M. Yeung and C. P. Lo (eds), Changing South-East Asian Cities: Readings on Urbanisation, London 1976. 33 Evers and Korff, Southeast Asian Urbanism, p. 143. 34 Serajul Hoque, "Micro-credit and the Reduction of Poverty in Bangladesh," journal of Contemporary Asia 34:1 (2004), pp. 21, 27.

Hernando de Soto, of course, is internationally famous for arguing that this enormous population of marginalized laborers and expeasants is a frenzied beehive of proto-capitalists yearning for formal property rights and unregulated competitive space: "Marx would probably be shocked to find how in developing countries much of the teeming mass does not consist of oppressed legal proletarians but of oppressed extralegal small entrepreneurs''20 De Soto's bootstrap model of development, as we have seen, is especially popular because of the simplicity of his recipe: get the state (and formal-sector labor unions) out of the way, add micro-credit for micro-entrepreneurs and land titling for squatters, then let markets take their course to produce the transubstantiation of poverty into capital. (De Soto-inspired optimism, in its most absurd version, has led some development-aid bureaucrats to redefine slums as "Strategic Low-Income Urban Management Systems.")21 This semi-utopian view of the informal sector, however, grows out of a nested set of epistemological fallacies. 18 Obetai, Population Growth, Employment andPoverty in Third-World Mega-Cities, p. 64.


pages: 580 words: 168,476

The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz

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affirmative action, Affordable Care Act / Obamacare, airline deregulation, Andrei Shleifer, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collapse of Lehman Brothers, collective bargaining, colonial rule, corporate governance, Credit Default Swap, Daniel Kahneman / Amos Tversky, Dava Sobel, declining real wages, deskilling, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, framing effect, full employment, George Akerlof, Gini coefficient, income inequality, income per capita, indoor plumbing, inflation targeting, invisible hand, John Harrison: Longitude, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, London Interbank Offered Rate, lone genius, low skilled workers, Mark Zuckerberg, market bubble, market fundamentalism, medical bankruptcy, microcredit, moral hazard, mortgage tax deduction, obamacare, offshore financial centre, paper trading, patent troll, payday loans, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, shareholder value, short selling, Silicon Valley, Simon Kuznets, spectrum auction, Steve Jobs, technology bubble, The Chicago School, The Fortune at the Bottom of the Pyramid, The Myth of the Rational Market, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, ultimatum game, uranium enrichment, very high income, We are the 99%, women in the workforce

And yet the interest rate charged to students was incommensurate with these risks: the banks have used the student loan programs (especially those with government guarantees) as an easy source of money—so much so that when the government finally scaled down the program in 2010, the government and the students could, between them, pocket tens of billions of dollars that previously had gone to the banks.25 America sets the pattern Usury (charging exorbitant interest rates),26 of course, is not limited to the United States. In fact, around the world the poor are sinking in debt as a result of the spread of the same rogue capitalism. India had its own version of a subprime mortgage crisis: the hugely successful microcredit schemes that have provided credit to poor farmers and transformed their lives turned ugly once the profit motive was introduced. Initially developed by Muhammad Yunus of the Grameen Bank and Sir Fazle Hasan Abed of BRAC in Bangladesh, microcredit schemes transformed millions of lives by giving the poorest, who had never banked, access to small loans. Women were the main beneficiaries. Allowed to raise chickens and engage in other productive activities, they were able to improve living standards in their families and their communities.

Banks all over the world enthusiastically embraced microfinance for the poor. In India the banks seized upon the new opportunities, realizing that poor Indian families would pay high interest rates for loans not just to improve livelihoods but to pay for medicines for sick parents or to finance a wedding for a daughter.28 They could cloak these loans in a mantle of civic virtue, describing them as “microcredit,” as if they were the same thing that Grameen and BRAC were doing in neighboring Bangladesh—until a wave of suicides from farmers overburdened with debt called attention to the fact that they were not the same. THE MORTGAGE CRISIS AND THE ADMINISTRATION OF THE RULE OF LAW When the subprime mortgage crisis finally broke wide open, precipitating the Great Recession of 2008, the country’s response to the ensuing flood of foreclosures provided a test of America”s “rule of law.”

Weiss, “Credit Rationing in Markets with Imperfect Information,” American Economic Review 71, no. 3 (June 1981): 393–410. In the United States beginning in 1980, federal laws increasingly preempted state laws that attempted to restrict usury. 27. See C. K. Prahalad, The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits (Upper Saddle River, NJ: Prentice Hall, 2005). 28. The former governor of the Reserve Bank of India explicitly made the link between microcredit in India and America’s subprime lending: Y. V. Reddy “Microfinance in India Is like Subprime Lending,” Economic Times, November 23, 2010, available at http://articles.economictimes.indiatimes.com/2010-11-23/news/27602978_1_priority-sector-lending-sks-microfinance-microfinance-industry. 29. The FBI’s mortgage fraud unit reports that fraud continued to be elevated into 2010. Mortgage fraud–related suspicious activity reports (SARs) rose sixfold from 2003 to 2007.


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Common Wealth: Economics for a Crowded Planet by Jeffrey Sachs

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agricultural Revolution, air freight, back-to-the-land, British Empire, business process, carbon footprint, clean water, colonial rule, corporate social responsibility, correlation does not imply causation, demographic transition, Diane Coyle, Edward Glaeser, energy security, failed state, Gini coefficient, Haber-Bosch Process, income inequality, income per capita, intermodal, invention of agriculture, invention of the steam engine, invisible hand, Joseph Schumpeter, knowledge worker, labor-force participation, labour mobility, low skilled workers, microcredit, oil shale / tar sands, peak oil, profit maximization, profit motive, purchasing power parity, road to serfdom, Ronald Reagan, Simon Kuznets, Skype, statistical model, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, unemployed young men, War on Poverty, women in the workforce, working-age population

Innovators can be motivated by the promise of future profits derived from patents, prize money offered by foundations and governments (as with the Gates Foundation’s Grand Challenges in Global Health Initiative), purely socially minded aims (as with social entrepreneurs), and the desire to solve technical problems (as with engineers). Nongovernmental organizations have repeatedly played a pivotal role in identifying local needs, proving new technologies, and perhaps most important, identifying novel implementation strategies. Perhaps the leading example of NGO leadership in recent years has been in the area of microcredit, pioneered by Nobel laureate Muhammad Yunus of Bangladesh and described in his book Banker to the Poor. Microcredit has revolutionized banking by making it possible for the very poor to take out small loans without collateral. The idea is that by lending to small groups rather than to individuals, collateral can be replaced by trust and group enforcement, since the group monitors its own members and ensures repayment. If one member of the group defaults, the whole group is held responsible and must pay back the defaulter’s loan.

Even a very small loan makes it possible to purchase crucial materials or equipment to start a small, income-generating business. The loans also have the advantage of breaking the reliance of the poor on moneylenders who charge such high interest rates that the poor who borrow from them can never repay their debts. Microcredit was unrolled gradually, first at the level of one village, then across one district, followed by several districts and, eventually, the entire country. The model evolved into a full-fledged financial institution, the Grameen Bank, which has more than seven million borrowers today. Grameen’s model has been replicated across the developing world, and microcredit is now a widely used tool in the fight against global poverty. The Grameen model exemplifies how innovative solutions are first tried on a small scale and are gradually scaled up once their success has been proven.


pages: 299 words: 83,854

Shortchanged: Life and Debt in the Fringe Economy by Howard Karger

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big-box store, blue-collar work, corporate social responsibility, credit crunch, delayed gratification, financial deregulation, illegal immigration, labor-force participation, late fees, London Interbank Offered Rate, low skilled workers, microcredit, mortgage debt, New Journalism, New Urbanism, offshore financial centre, payday loans, predatory finance, race to the bottom, Silicon Valley, Telecommunications Act of 1996, telemarketer, underbanked, working poor

In fact, the growth of the bank was so stunning that in only 28 years it grew to 1,326 branches, had 12,903 staff members, and operated in 48,000 of Bangladesh’s 68,000 villages. Using the concept of microcredit, the Grameen Bank offers collateral-free loans sometimes worth just a few U.S. dollars and rarely more than $200. The bank doesn’t provide charity—it charges an annual interest rate of 20% and is strict about the terms. Ninety-eight percent of the loans are repaid.11 In 1987 former president Bill Clinton, then the governor of Arkansas, approached the Grameen Bank to ask for help in replicating the model in the United States. Although at one point there were 20 Grameen-style programs in the United States, the microcredit concept never really took hold on a large scale. Nevertheless, through one form or another, several groups continue to work toward developing the concept of microcredit in the United States, and it continues to represent a viable model for local community development.


pages: 369 words: 94,588

The Enigma of Capital: And the Crises of Capitalism by David Harvey

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accounting loophole / creative accounting, anti-communist, Asian financial crisis, bank run, banking crisis, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, call centre, capital controls, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, deskilling, equal pay for equal work, European colonialism, failed state, financial innovation, Frank Gehry, full employment, global reserve currency, Google Earth, Guggenheim Bilbao, illegal immigration, indoor plumbing, interest rate swap, invention of the steam engine, Jane Jacobs, joint-stock company, Joseph Schumpeter, Just-in-time delivery, land reform, liquidity trap, Long Term Capital Management, market bubble, means of production, megacity, microcredit, moral hazard, mortgage debt, new economy, New Urbanism, Northern Rock, oil shale / tar sands, peak oil, place-making, Ponzi scheme, precariat, reserve currency, Ronald Reagan, sharing economy, Silicon Valley, special drawing rights, special economic zone, statistical arbitrage, structural adjustment programs, the built environment, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, too big to fail, trickle-down economics, urban renewal, urban sprawl, white flight, women in the workforce

This vast army of people provides both a potential labour reserve as well as a potential market. In recent years, for example, what was once referred to in the official language of international institutions as ‘the informal sector’ (and therefore somehow outside of the logic of capital accumulation) has been redefined as a world of ‘microenterprises’. The fate of these enterprises is then linked to that of capital through the extension of microcredit and microfinance schemes to these microenterprises. These schemes extend small amounts of credit (at very high rates of interest) to collectives (usually a fairly small group of women) from within the 2 billion people who live on less than 2 dollars a day. The purported aim is to permit the population to raise themselves out of poverty and join the merry business of capital accumulation. Some succeed, but for the rest it means debt peonage.

Funded by both state and private interests, populated often by idealist thinkers and organisers (they constitute a vast employment programme), and for the most part dedicated to single-issue questions (environment, poverty, women’s rights, anti-slavery and trafficking work, etc.), they refrain from straight anti-capitalist politics even as they espouse progressive ideas and causes. In some instances, however, they are actively neoliberal, engaging in privatisation of state welfare functions or fostering institutional reforms to facilitate market integration of marginalised populations (microcredit and microfinance schemes for low income populations are a classic example of this). While there are many radical and dedicated practitioners in this NGO world, their work is at best ameliorative. Collectively, they have a spotty record of progressive achievements, although in certain arenas such as women’s rights, health care and environmental preservation they can reasonably claim to have made major contributions to human betterment.

.: Limits to Growth 72 meat-based diets 73, 74 Medicare 28–9, 224 Mellon, Andrew 11, 98 mercantilism 206 merchant capitalists 40 mergers 49, 50 forced 261 Merrill Lynch 12 Merton, Robert 100 methane gas 73 Mexico debt crisis (1982) 10, 19 northern Miexico’s proximity to the US market 36 peso rescue 261 privatisation of telecommunications 29 and remittances 38 standard of living 10 Mexico City 243 microcredit schemes 145–6 microeconomics 237 microenterprises 145–6 microfinance schemes 145–6 Middle East, and oil issue 77, 170, 210 militarisation 170 ‘military-industrial complex’ 91 minorities: colonisation of urban neighbourhoods 247, 248 Mitterrand, François 198 modelling of markets 262 modernism 171 monarchy 249 monetarism 237 monetisation 244 money centralised money power 49–50, 52 a form of social power 43, 44 limitlessness of 43, 47 loss of confidence in the symbols/quality of money 114 universality of 106 monoculture 186 Monopolies Commission 52 monopolisation 43, 68, 95, 113, 116, 221 Monsanto 186 Montreal Protocol (1989) 76, 187 Morgan Stanley 19 Morishima, Michio 70 Morris, William 160 mortgages annual rate of change in US mortgage debt 7 mortgage finance for housing 170 mortgage-backed bonds futures 262 mortgage-backed securities 4, 262 secondary mortgage market 173, 174 securitisation of local 42 securitisation of mortgage debt 85 subprime 49, 174 Moses, Robert 169, 171, 177 MST (Brazil) 257 multiculturalism 131, 176, 231, 238, 258 Mumbai, India anti-Muslim riots (early 1990s) 247 redevelopment 178–9 municipal budgets 5 Museum of Modern Art, New York 21 Myrdal, Gunnar 196 N Nandigram, West Bengal 180 Napoleon III, Emperor 167, 168 national debt 48 National Economic Council (US) 11, 236 national-origin quotas 14 nationalisation 2, 4, 8, 224 nationalism 55–6, 143, 194, 204 NATO 203 natural gas 188 ‘natural limits’ 47 natural resources 30, 71 natural scarcity 72, 73, 78, 80, 83, 84, 121 nature and capital 88 ‘first nature’ 184 relation to 121, 122 ‘the revenge of nature’ 185 ‘second nature’ 184, 185, 187 as a social product 188 neocolonialism 208, 212 neoliberal counter-revolution 113 neoliberalism 10, 11, 19, 66, 131, 132, 141, 172, 175, 197, 208, 218, 224, 225, 233, 237, 243, 255 Nepal: communist rule in 226 Nevada, foreclosure wave in 1 New Deal 71 ‘new economy’ (1990s) 97 New Labour 45, 255 ‘new urbanism’ movement 175 New York City 11 September 2001 attacks 41 fiscal crisis (1975) 10, 172, 261 investment banks 19, 28 New York metropolitan region 169, 196 Nicaragua 189 Niger delta 251 non-governmental organisations (NGOs) 35, 253–4 non-interventionism 10 North Africa, French import of labour from 14 North America, settlement in 145 North American Free Trade Association (NAFTA) 200 Northern Ireland emergency 247 Northern Rock 2 Norway: Nordic cris (1992) 8 nuclear power 188 O Obama, Barack 11, 27, 34, 210 Obama administration 78, 121 O’Connor, Jim 77, 78 offshoring 131 Ogoni people 251 oil cheap 76–7 differential rent on oil wells 83 futures 83, 84 a non-renewable resource 82 ‘peak oil’ 38, 73, 78, 79, 80 prices 77–8, 80, 82–3, 261 and raw materials prices 6 rents 83 United States and 76–7, 79, 121, 170, 210, 261 OPEC (Organisation of Oil-Producing Countries) 83, 84 options markets currency 262 equity values 262 unregulated 99, 100 Orange County, California bankruptcy 100, 261 Organisation for Economic Cooperation and Development (OECD) 51 organisational change 98, 101 organisational forms 47, 101, 121, 127, 134, 238 Ottoman Empire 194 ‘over the counter’ trading 24, 25 overaccumulation crises 45 ozone hole 74 ozone layer 187 P Pakistan: US involvement 210 Palley, Thomas 236 Paris ‘the city of light’ 168 epicentre of 1968 confrontations 177, 243 Haussmann’s rebuilding of 49, 167–8, 169, 171, 176 municipal budget crashes (1868) 54 Paris Commune (1871) 168, 171, 176, 225, 243, 244 Partnoy, Frank: Ubfectious Greed 25 patents 221 patent laws 95 patriarchy 104 pensions pension funds 4, 5, 245 reneging on obligations 49 Péreire brothers 49, 54, 98, 174 pesticides 185, 186, 187 petty bourgeois 56 pharmaceutical sector 129, 245 philanthropy 44 Philippines: excessive urban development 8 Phillips, Kevin 206 Pinochet, General Augusto 15, 64 plant 58 Poland, lending to 19 political parties, radical 255–6 politics capitalist 76 class 62 co-revolutionary 241 commodified 219 depoliticised 219 energy 77 identity 131 labour organizing 255 left 255 transformative 207 pollution air 77 oceanic 74 rights 21 ‘Ponts et Chaussées’ organisation 92 Ponzi schemes 21, 114, 245, 246 pop music 245–6 Pope, Alexander 156 population growth 59, 72, 74, 121, 167 and capital accumulation 144–7 populism 55–6 portfolio insurance 262 poverty and capitalism 72 criminalisation and incarceration of the poor 15 feminisation of 15, 258 ‘Great Society’ anti-poverty programmes 32 Prague 243 prices commodity 37, 73 energy 78 food grain 79–80 land 8, 9, 182–3 oil 8, 28, 37–8, 77–8, 80, 82–3, 261 property 4, 182–3 raw material 37 reserve price 81–2 rising 73 share 7 primitive accumulation 58, 63–4, 108, 249 private consortia 50 private equity groups 50 private property and radical egalitarianism 233, 234 see also property markets; property rights; property values privatisation 10, 28, 29, 49, 251, 256, 257 pro-natal policies 59 production expansion of 112, 113 inadequate means of 47 investment in 114 liberating the concept 87 low-profit 29 offshore 16 production of urbanisation 87 reorganisation and relocation of 33 revolutionising of 89 surplus 45 technologies 101 productivity agreements 14, 60, 96 agricultural 119 cotton industry 67 gains 88, 89 Japan and West Germany 33 rising 96, 186 products development 95 innovation 95 new lines 94, 95 niches 94 profit squeeze 65, 66, 116 profitability constrains 30 falling 94, 131 of the financial sector 51 and wages 60 profits easy 15 excess 81, 90 falling 29, 72, 94, 116, 117 privatising 10 rates 70, 94, 101 realisation of 108 proletarianisation 60, 62 property markets crash in US and UK (1973–75) 8, 171–2, 261 overextension in 85 property market-led Nordic and Japanese bank crises 261 property-led crises (2007–10) 10, 261 real estate bubble 261 recession in UK (after 1987) 261 property rights 69, 81–2, 90, 122, 179, 198, 233, 244, 245 Property Share Price Index (UK) 7 property values 171, 181, 197, 248 prostitution 15 protectionism 31, 33, 43, 211 punctuated equilibrium theory of natural evolution 130 Putin, Vladimir 29, 80 Q Q’ing dynasty 194 quotas 16 R R&D (research and development) 92, 95–6 race issues 104 racism 61, 258 radical egalitarianism 230–34 railroads 42, 49, 191 Railwan, rise of (1970s) 35 rare earth metals 188 raw materials 6, 16, 37, 58, 77, 101, 113, 140, 144, 234 RBS 20 Reagan, Ronald 15, 64, 131, 141 Reagan-Thatcher counter revolution (early 1980s) 71 Reagan administration 1, 19 Reagan recession (1980–82) 60, 261 Real Estate Investment Trusts (US) 7 recession 1970s 171–2 language of 27 Reagan (1980–82) 60, 261 Red Brigade 254 reforestation 184 refrigeration 74 reinvestment 43, 45, 66–7, 110–12, 116 religious fundamentalism 203 religious issues 104 remittances 38, 140, 147 rentiers 40 rents differential rent 81, 82, 83 on intellectual property rights 221 land 182 monetisation of 48, 109 monopoly 51, 81–2, 83 oil 83 on patents 221 rising 181 reproduction schemas 70 Republican Party (US) 11, 141 reserve price 81 resource values 234 Ricardo, David 72, 94 risks, socialising 10 robbery 44 Robinson, Joan 238 robotisation 14, 136 Rockefeller, John D. 98 Rockefeller brothers 131 Rockefeller foundation 44, 186 Roman Empire 194 Roosevelt, Franklin D. 71 Rothschild family 98, 163 Royal Society 91, 156 royalties 40 Rubin, Robert 98 ‘rule of experts’ 99, 100–101 Russia bankruptcy (1998) 246, 261 capital flight crisis 261 defaults on its debt (1998) 6 oil and natural gas flow to Ukraine 68 oil production 6 oligarchs 29 see also Soviet Union S Saddam Hussein 210 Saint-Simon, Claude Henri de Rouvroy, Comte de 49 Saint-Simonians 87, 168 Salomon Brothers 24 Samuelson, Robert 235, 239 Sandino, Augusto 189 Sanford, Charles 98 satellites 156 savings 140 Scholes, Myron 100 Schumer, Charles 11 Schumpeter, Joseph 46 Seattle battle of (1999) 38, 227 general strike (1918) 243 software development in 195 Second World War 32, 168–70, 214 sectarianism 252 securitisation 17, 36, 42 Sejong, South Korea 124–6 service industries 41 sexism 61 sexual preferences issues 104, 131, 176 Shanghai Commune (1967) 243 shark hunting 73, 76 Shell Oil 79, 251 Shenzhen, China 36 shop floor organisers (shop stewards) 103 Silicon Valley 162, 195, 216 Singapore follows Japanese model 92 industrialisation 68 rise of (1970s) 35 slavery 144 domestic 15 slums 16, 151–2, 176, 178–9 small operators, dispossession of 50 Smith, Adam 90, 164 The Wealth of Nations 35 social democracy 255 ‘social democratic’ consensus (1960s) 64 social inequality 224 social relations 101, 102, 104, 105, 119, 121, 122, 123, 126, 127, 135–9, 152, 240 loss of 246 social security 224 social services 256 social struggles 193 social welfarism 255 socialism 136, 223, 228, 242, 249 compared with communism 224 solidarity economy 151, 254 Soros, George 44, 98, 221 Soros foundation 44 South Korea Asian Currency Crisis 261 excessive urban development 8 falling exports 6 follows Japanese model 92 rise of (1970s) 35 south-east Asia: crash of 1997–8 6, 8, 49, 246 Soviet Union in alliance with US against fascism 169 break-up of 208, 217, 227 collapse of communism 16 collectivisation of agriculture 250 ‘space race’ (1960s and 1970s) 156 see also Russia space domination of 156–8, 207 fixed spaces 190 ‘space race’ (1960s and 1970s) 156 Spain property-led crisis (2007–10) 5–6, 261 unemployment 6 spatial monopoly 164–5 special drawing rights 32, 34 special economic zones 36 special investment vehicles 36, 262 special purpose entities 262 speculation 52–3 speculative binges 52 speed-up 41, 42 stagflation 113 stagnation 116 Stalin, Joseph 136, 250 Standard Oil 98 state formation 196, 197, 202 state-corporate nexus 204 ‘space race’ (1960s and 1970s) 156 state-finance nexus 204, 205, 237, 256 blind belief in its corrective powers 55 ‘central nervous system’ for capital accumulation 54 characteristics of a feudal institution 55 and the current crisis 118 defined 48 failure of 56–7 forms of 55 fusion of state and financial powers 115 innovation in 85 international version of 51 overwhelmed by centralised credit power 52 pressure on 54 radical reconstruction of 131 role of 51 and state-corporate research nexus 97 suburbanisation 171 tilts to favour particular interests 56 statistical arbitrage strategies 262 steam engine, invention of 78, 89 Stiglitz, Joseph 45 stimulus packages 261 stock markets crash (1929) 211, 217 crashes (2001–02) 261 massive liquidity injections (1987) 236, 261 Stockton, California 2 ’structural adjustment’ programmes vii, 19, 261 subcontracting 131 subprime loans 1 subprime mortgage crisis 2 substance abuse 151 suburbanisation 73, 74, 76–7, 106–7, 169, 170, 171, 181 Summers, Larry 11, 44–5, 236 supermarket chains 50 supply-side theory 237 surveillance 92, 204 swaps credit 21 Credit Default 24, 262 currency 262 equity index 262 interest rate 24, 262 Sweden banking system crash (1992) 8, 45 Nordic crisis 8 Yugoslav immigrants 14 Sweezey, Paul 52, 113 ‘switching crises’ 93 systematic ‘moral hazard’ 10 systemic risks vii T Taipei: computer chips and household technologies in 195 Taiwan falling exports 6 follows Japanese model 92 takeovers 49 Taliban 226 tariffs 16 taxation 244 favouring the rich 45 inheritance 44 progressive 44 and the state 48, 145 strong tax base 149 tax rebates 107 tax revenues 40 weak tax base 150 ‘Teamsters for Turtles’ logo 55 technological dynamism 134 technologies change/innovation/new 33, 34, 63, 67, 70, 96–7, 98, 101, 103, 121, 127, 134, 188, 193, 221, 249 electronic 131–2 ‘green’ 188, 221 inappropriate 47 labour fights new technologies 60 labour-saving 14–15, 60, 116 ‘rule of experts’ 99, 100–101 technological comparative edge 95 transport 62 tectonic movements 75 territorial associations 193–4, 195, 196 territorial logic 204–5 Thailand Asian Currency Crisis 261 excessive urban development 8 Thatcher, Margaret, Baroness 15, 38, 64, 131, 197, 255 Thatcherites 224 ‘Third Italy’, Bologna 162, 195 time-space compression 158 time-space configurations 190 Toys ‘R’ Us 17 trade barriers to 16 collapses in foreign trade (2007–10) 261 fall in global international trade 6 increase in volume of trading 262 trade wars 211 trade unions 63 productivity agreements 60 and US auto industry 56 trafficking human 44 illegal 43 training 59 transport costs 164 innovations 42, 93 systems 16, 67 technology 62 Treasury Bill futures 262 Treasury bond futures 262 Treasury instruments 262 TRIPS agreement 245 Tronti, Mario 102 Trotskyists 253, 255 Tucuman uprising (1969) 243 Turin: communal ‘houses of the people’ 243 Turin Workers Councils 243 U UBS 20 Ukraine, Russian oil and natural gas flow to 68 ultraviolet radiation 187 UN Declaration of Human Rights 234 UN development report (1996) 110 Un-American Activities Committee hearings 169 underconsumptionist traditions 116 unemployment 131, 150 benefits 60 creation of 15 in the European Union 140 job losses 93 lay-offs 60 mass 6, 66, 261 rising 15, 37, 113 and technological change 14, 60, 93 in US 5, 6, 60, 168, 215, 261 unionisation 103, 107 United Fruit Company 189 United Kingdom economy in serious difficulty 5 forced to nationalise Northern Rock 2 property market crash 261 real average earnings 13 train network 28 United Nations 31, 208 United States agricultural subsidies 79 in alliance with Soviet Union against fascism 169 anti-trust legislation 52 auto industry 56 blockbusting neighbourhoods 248 booming but debt-filled consumer markets 141 and capital surplus absorption 31–2 competition in labour markets 61 constraints to excessive concentration of money power 44–5 consumerism 109 conumer debt service ratio 18 cross-border leasing with Germany 142–3 debt 158, 206 debt bubble 18 fiscal crises of federal, state and local governments 261 health care 28–9 heavy losses in derivatives 261 home ownership 3 housing foreclosure crises 1–2, 4, 38, 166 industries dependent on trade seriously hit 141 interventionism in Iraq and Afghanistan 210 investment bankers rescued 261 investment failures in real estate 261 lack of belief in theory of evolution 129 land speculation scheme 187–8 oil issue 76–7, 79, 80, 121, 170, 210, 261 population growth 146 proletarianisation 60 property-led crisis (2007–10) 261 pursuit of science and technology 129 radical anti-authoritarianism 199 Reagan Recession 261 rescue of financial institutions 261 research universities 95 the reversing origins of US corporate profits (1950–2004) 22 the right to the city movement 257 ‘right to work’ states 65 savings and loan crisis (1984–92) 8 secondary mortgage market 173 ‘space race’ (1960s and 1970s) 156 suburbs 106–7, 149–50, 170 train network 28 unemployment 5, 6, 60, 168, 215, 261 unrestricted capitalist development 113 value of US stocks and homes, as a percentage of GDP 22 and Vietnam War 171 wages 13, 62 welfare provision 141 ‘urban crisis’ (1960s) 170 urban ‘heat islands’ 77 urban imagineering 193 urban social movements 180 urbanisation 74, 85, 87, 119, 131, 137, 166, 167, 172–3, 174, 240, 243 US Congress 5, 169, 187–8 US Declaration of Independence 199 US National Intelligence Council 34–5 US Senate 79 US Supreme Court 179 US Treasury and Goldman Sachs 11 rescue of Continental Illinois Bank 261 V Vanderbilt family 98 Vatican 44 Veblen, Thorstein 181–2 Venezuela 256 oil production 6 Vietnam War 32, 171 Volcker, Paul 2, 236 Volcker interest rate shock 261 W wage goods 70, 107, 112, 162 wages and living standards 89 a living wage 63 national minimum wage 63 rates 13, 14, 59–64, 66, 109 real 107 repression 12, 16, 21, 107, 110, 118, 131, 172 stagnation 15 wage bargaining 63 Wal-Mart 17, 29, 64, 89 Wall Street, New York 35, 162, 200, 219, 220 banking institutions 11 bonuses 2 ‘Party of Wall Street’ 11, 20, 200 ‘War on Terror’ 34, 92 warfare 202, 204 Wasserstein, Bruce 98 waste disposal 143 Watt, James 89 wealth accumulation by capitalist class interests 12 centralisation of 10 declining 131 flow of 35 wealth transfer 109–10 weather systems 153–4 Weather Underground 254 Weill, Sandy 98 Welch, Jack 98 Westphalia, Treaty of (1648) 91 Whitehead, Alfred North 75 Wilson, Harold 56 wind turbines 188 women domestic slavery 15 mobilisation of 59, 60 prostitution 15 rights 176, 251, 258 wages 62 workers’ collectives 234 working hours 59 World Bank 36, 51, 69, 192, 200, 251 ‘Fifty Years is Enough’ campaign 55 predicts negative growth in the global economy 6 World Bank Development Report (2009) 26 World Trade Organisation (WTO) 200, 227 agreements 69 street protests against (Seattle, 1999) 55 TRIPS agreement 245 and US agricultural subsidies 79 WorldCom 8, 100, 261 worldwide web 42 Wriston, Walter 19 X X-rays 99 Y Yugoslavia dissolution of 208 ethnic cleansings 247 Z Zapatista revolutionary movement 207, 226, 252 Zola, Émile 53 The Belly of Paris 168 The Ladies’ Paradise 168


pages: 261 words: 86,905

How to Speak Money: What the Money People Say--And What It Really Means by John Lanchester

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asset allocation, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, blood diamonds, Bretton Woods, BRICs, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collective bargaining, credit crunch, Credit Default Swap, crony capitalism, Dava Sobel, David Graeber, disintermediation, double entry bookkeeping, en.wikipedia.org, estate planning, financial innovation, Flash crash, forward guidance, Gini coefficient, global reserve currency, high net worth, High speed trading, hindsight bias, income inequality, inflation targeting, interest rate swap, Isaac Newton, Jaron Lanier, joint-stock company, joint-stock limited liability company, Kodak vs Instagram, liquidity trap, London Interbank Offered Rate, London Whale, loss aversion, margin call, McJob, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, neoliberal agenda, New Urbanism, Nick Leeson, Nikolai Kondratiev, Nixon shock, Northern Rock, offshore financial centre, oil shock, open economy, paradox of thrift, Plutocrats, plutocrats, Ponzi scheme, purchasing power parity, pushing on a string, quantitative easing, random walk, rent-seeking, reserve currency, Richard Feynman, Richard Feynman, road to serfdom, Ronald Reagan, Satoshi Nakamoto, security theater, shareholder value, Silicon Valley, six sigma, South Sea Bubble, sovereign wealth fund, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, trickle-down economics, Washington Consensus, working poor, yield curve

Some economists think that Britain is in the grip of a PLOG. P2P A term all the vogue in certain circles at the moment: it means peer to peer, and in the context of finance refers to lending, usually in the form of microcredit or small loans. A number of companies are offering this service as a way of providing, on the one hand, access to credit for people who are finding it difficult to obtain it through conventional channels and, on the other, a way of earning a decent rate of interest on money while also doing something socially useful. The growth of P2P is an extension of the ideas of the Nobel Peace Prize–winning Bangladeshi economist Muhammad Yunus, who came up with the idea of microcredit, or small loans to people too poor to have access to conventional bank credit. P2P is controversial because the rates of interest can be high and also because it is a way of profiting from the poor—even if it is a creative, flexible, useful, and much-appreciated way of profiting from the poor.

P2P is controversial because the rates of interest can be high and also because it is a way of profiting from the poor—even if it is a creative, flexible, useful, and much-appreciated way of profiting from the poor. It is an example of capitalism at its most flexible and creative, rather than any kind of challenge to the capitalist order. At the same time, P2P lending and microcredit also begin to raise the question, what exactly are banks for? It has long been an irony of economics that in a purely efficient market, banks would not exist. Lenders with excess capital would directly seek out borrowers who need the capital, and both would benefit from the transaction, rather than the current model in which banks borrow money at say 0.25 percent and lend it at 5 percent and pocket the difference. Big companies already cut banks out of the process of borrowing, by raising money through issuing their own bonds.


pages: 330 words: 77,729

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes by Mark Skousen

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Albert Einstein, banking crisis, Berlin Wall, Bretton Woods, business climate, David Ricardo: comparative advantage, delayed gratification, experimental economics, financial independence, Financial Instability Hypothesis, full employment, Hernando de Soto, housing crisis, Hyman Minsky, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, laissez-faire capitalism, liquidity trap, means of production, microcredit, minimum wage unemployment, open economy, paradox of thrift, price stability, pushing on a string, rent control, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Shiller, rolodex, Ronald Coase, Ronald Reagan, school choice, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, unorthodox policies

In a 1993 study of the Four Tigers and the East Asian economic miracle, it concludes, "The rapid growth in each country was primarily due to the application of a set of common, market-friendly economic policies, leading to both higher accumulation and better allocation of resources" (World Bank 1993, vi). Perhaps the best example of change in development economics is reflected in the work of Muhammad Yunus, president of the Grameen Bank in Bangladesh and founder of the micro-credit revolution. In his book, Banker to the Poor; Yunus tells how he grew up under the influence of Marxist economics. But after earning a Ph.D. in economics at Vanderbilt University, he saw firsthand "how the market [in the United States] liberates the individual I do believe in the power of the global free-market economy and in using capitalist tools I also believe that providing unemployment benefits is not the best way to address poverty."

Etienne de. 141«4 213 Marginal productivity theory. 118-120 1930's, 135 Marginal utility. 108. 114 Materialism. 97 Marginalist revolution. 107-110 Mathematics. 55. 56. 115-116. 168 Marginality principle. 117 McConnell, Campbell. 179 Market economy, invisible hand. 19 Meltzer. Allan H., 154 Market imperfection. 214-215 Menger. Carl. 107-108 Market rate of interest. 130 Mercantilism. 7-9. 22. 44 Markets. Say's law oiWee Say's Law Micro-credit revolution. 204 Marshall. Alfred. 112-113. 115. 133q Microeconomics Marshall Plan. 201 imperfect competition. 134-135 Marx. Eleanor. 83 macroeconomics linked to. 129. 137«2 Marx. Karl neoclassical. 205 an antieconomist, 94-95 Mill. John Stuart. 50. 61-63. 106. 122 beard and Zeus. 78 Minsky. Hyman P.. 153. 175 college radical. 70-71 Mises. Ludwig von. 94. 128-132 communism. 65-66. 87-89. 95 on Keynes. 151. 164. 192 Communist Manifesto.


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Revolution at Point Zero: Housework, Reproduction, and Feminist Struggle by Silvia Federici

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Community Supported Agriculture, declining real wages, equal pay for equal work, feminist movement, financial independence, global village, illegal immigration, informal economy, invisible hand, labor-force participation, land tenure, means of production, microcredit, neoliberal agenda, new economy, Occupy movement, planetary scale, Scramble for Africa, statistical model, structural adjustment programs, the market place, trade liberalization, UNCLOS, wages for housework, Washington Consensus, women in the workforce, World Values Survey

In Africa, women had consistently refused being recruited to work on their husbands’ cash crops, and instead had defended subsistence oriented agriculture, turning their villages from sites for the reproduction of cheap labor—as in the image of it proposed by Meillassoux11—into sites of resistance to exploitation. By the 1980s, this resistance was recognized as the main factor in the crisis of the World Bank’s agricultural development projects, prompting a flood of articles on “women’s contribution to development,” and later, initiatives aimed at integrating them into the money economy such as NGO-sponsored “income generating projects” and microcredit lending schemes. Given these events, it is not surprising that the restructuring produced by the globalization of the world economy has led to a major reorganization of reproduction, as well as a campaign against women in the name of “population control.” In what follows, I outline the modalities of this restructuring, identify the main trends, its social consequences, and its impact on class relations.

Refusal to be without access to land has been so strong that, in the towns, many women have taken over plots in public lands, planted corn and cassava in vacant lots, in this process changing the urban landscape of African cities and breaking down the separation between town and country.14 In India too, women have restored degraded forests, guarded trees, joined hands to chase away the loggers, and made blockades against mining operations and the construction of dams.15 The other side of women’s struggle for direct access to means of reproduction has been the formation, across the Third World—from Cambodia to Senegal—of credit associations that function as money commons.16 Differently named, “tontines” (in parts of Africa) are autonomous, self-managed, women-made banking systems, providing cash to individuals or groups that can have no access to banks, working purely on the basis of trust. In this, they are completely different from the microcredit systems promoted by the World Bank, which functions on the basis of shame, arriving to the extreme (e.g., in Niger) of posting in public places the pictures of the women who fail to repay the loans so that some have been driven to suicide.17 Women have also led the effort to collectivize reproductive labor both as a means to economize on the cost of reproduction, and protect each other from poverty, state violence and the violence of individual men.


pages: 91 words: 26,009

Capitalism: A Ghost Story by Arundhati Roy

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Bretton Woods, corporate governance, feminist movement, Frank Gehry, ghettoisation, Howard Zinn, informal economy, land reform, Mahatma Gandhi, means of production, megacity, microcredit, neoliberal agenda, Occupy movement, RAND corporation, reserve currency, special economic zone, spectrum auction, stem cell, The Chicago School, Washington Consensus, WikiLeaks

Capitalists seized on the first half of Filene’s suggestion and, by disbursing “affordable” loans of tens of millions of dollars to working people, turned the US working class into people who are permanently in debt, running to catch up with their lifestyles.42 Many years later, this idea has trickled down to the impoverished countryside of Bangladesh when Mohammed Yunus and the Grameen Bank brought microcredit to starving peasants with disastrous consequences. The poor of the subcontinent have always lived in debt, in the merciless grip of the local village usurer—the Baniya. But microfinance has corporatized that too. Microfinance companies in India are responsible for hundreds of suicides—two hundred people in Andhra Pradesh in 2010 alone. A national daily recently published a suicide note by an eighteen-year-old girl who was forced to hand over her last 150 rupees, her school fees, to bullying employees of the microfinance company.


pages: 464 words: 116,945

Seventeen Contradictions and the End of Capitalism by David Harvey

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accounting loophole / creative accounting, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business climate, California gold rush, call centre, central bank independence, clean water, cloud computing, collapse of Lehman Brothers, colonial rule, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Deng Xiaoping, deskilling, falling living standards, fiat currency, first square of the chessboard, first square of the chessboard / second half of the chessboard, Food sovereignty, Frank Gehry, future of work, global reserve currency, Guggenheim Bilbao, income inequality, informal economy, invention of the steam engine, invisible hand, Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Just-in-time delivery, knowledge worker, low skilled workers, Mahatma Gandhi, market clearing, Martin Wolf, means of production, microcredit, new economy, New Urbanism, Occupy movement, peak oil, phenotype, Plutocrats, plutocrats, Ponzi scheme, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Gordon, Ronald Reagan, short selling, Silicon Valley, special economic zone, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, Tyler Cowen: Great Stagnation, wages for housework, Wall-E, women in the workforce, working poor, working-age population

What Randy Martin calls ‘the financialization of daily life’ has become a conspicuous insertion into social reproduction over the last generation.9 If we ask the elementary questions: how much social reproduction is debt-financed and what are the implications of that fact?, the answers are quite stunning. In many parts of the world the usurious moneylender has always been a significant figure and continues to be so up to this day. Social reproduction takes place in much of India under the shadow of the looming power of the usurer. This is not relieved by the arrival of the institutions of microcredit and microfinance (which in some instances have driven people – mostly women – to suicide as the only relief from their collective indebtedness). But personal indebtedness associated with social reproduction has now become a calamitous problem in one form or another almost everywhere. The huge indebtedness of students in the United States is now being mimicked in Britain, Chile and China, while borrowings to finance the conduct of everyday life have been mounting at astonishing rates.

Any so-called ‘radical’ strategy that seeks to empower the disempowered in the realm of social reproduction by opening up that realm to monetisation and market forces is headed in exactly the wrong direction. Providing financial literacy classes for the populace at large will simply expose that population to predatory practices as they seek to manage their own investment portfolios like minnows swimming in a sea of sharks. Providing microcredit and microfinance facilities encourages people to participate in the market economy but does so in such a way as to maximise the energy they have to expend while minimising their returns. Providing legal title for land and property ownership in the hope that this will bring economic and social stability to the lives of the marginalised will almost certainly lead in the long run to their dispossession and eviction from that space and place they already hold through customary use rights.

283 Maddison, Angus 227 Maghreb 174 Malcolm X 291 Maldives 260 Malthus, Thomas 229–30, 232–3, 244, 246, 251 Manchester 149, 159 Manhattan Institute 143 Mansion House, London 201 manufacturing 104, 239 Mao Zedong 291 maquilas 129, 174 Marcuse, Herbert 204, 289 market cornering 53 market economy 198, 205, 276 marketisation 243 Marshall Plan 153 Martin, Randy 194 Marx, Karl 106, 118, 122, 142, 207, 211 and alienation 125, 126, 213 in the British Museum library 4 on capital 220 conception of wealth 214 on the credit system 239 and deskilling 119 on equal rights 64 and falling profits 107 and fetishism 4 on freedom 207, 208, 213 and greed 33 ‘industrial reserve army’ 79–80 and isolation of workers 125 labour theory of value 109 and monetary system reforms 36 monopoly power and competition 135 reality and appearance 4, 5 as a revolutionary humanist 221 and social reproduction 182 and socialist utopian literature 184 and technological innovation 103 and theorists of the political left 54 and the ‘totally developed individual’ 126–7 and world crises xiii; Capital 57, 79–80, 81, 82, 119, 129, 132, 269, 286, 291–2 The Economic and Philosophic Manuscripts of 1844 269, 286 Grundrisse 97, 212–13 Theories of Surplus Value 1 Marxism contradiction between productive forces and social relations 269 ‘death of Marxism’ xii; ecologically sensitive 263 and humanism 284, 286, 287 ‘profit squeeze’ theory of crisis formation 65 traditional Marxist conception of socialism/ communism 91 Marxists 65, 109 MasterCard Priceless 275 Mau Mau movement 291 Melbourne 141 merchants 67 and industrial capital 179 price-gouging customers 54 and producers 74–5 Mercosur 159 Mexican migrants 115, 175, 195–6 Mexico 123, 129, 174 Mexico City riots (1968) x microcredit 194, 198 microfinance 186, 194, 198, 211 Microsoft 131 Middle East 124, 230 Milanovic, Branko 170 military, the capacities and powers 4 dominance 110 and technology 93, 95 ‘military-industrial complex’ 157 mind-brain duality 70 mining 94, 113, 123, 148, 239, 257 MIT (Massachusetts Institute of Technology) 292 Mitchell, David: Cloud Atlas 264 Mitchell, Timothy 122 Modern Times (film) 103 Mondragon 180 monetarism xi monetary wealth and incomes, inequalities in (1920s) x 1071 monetisation 44, 55, 60, 61, 62, 115, 192–3, 198, 235, 243, 250, 253, 261, 262 money abandonment of metallic basis of global moneys 30, 37, 109 circulation of 15, 25, 30–31, 35 coinage 15, 27, 29, 30 commodification of 57 commodity moneys 27–31 creation of 30, 51, 173, 233, 238–9, 240 credit moneys 28, 30, 31, 152 cyber moneys 36, 109–10 electronic moneys 27, 29, 35, 36, 100 and exchange value 28, 35, 38 fiat 8, 27, 30, 40, 109, 233 gap between money and the value it represents 27 global monetary system 46–7 love of money as a possession 34 measures value 25, 28 a moneyless economy 36 oxidisation of 35 paper 15, 27, 29, 30, 31, 37, 40, 45 power of 25, 36, 59, 60, 62, 65–66, 131–6, 245, 266 quasi-money 35 relation between money and value 27, 35 represented as numbers 29–30 and social labour 25, 27, 31, 42, 55, 88, 243 and the state 45–6, 51, 173 storage of value 25, 26, 35 the US dollar 46–7 use value 28 money capital 28, 32, 59, 74, 142, 147, 158, 177, 178 money laundering 54, 109 ‘money of account’ 27–8, 30 monopolisation 53, 145 monopoly, monopolies 77 and competition 131–45, 218, 295 corporate 123 monetary system 45, 46, 48, 51 monopoly power 45, 46, 51, 93, 117, 120, 132, 133–4, 136, 137, 139, 141, 142–3 monopoly pricing 72, 132 natural 118, 132 of state over legitimate use of force and violence 42, 44, 45, 51, 88, 155, 173 see also prices, monopoly monopsony 131 Monsanto 123 Montreal Protocol 254, 259 ‘moral restraints’ 229, 233 mortgages 19, 21, 28, 32, 54, 67, 82, 239 multiculturalism 166 Mumbai 155, 159 Murdoch, Rupert xi Myrdal, Gunnar 150 N NAFTA 159 name branding 31, 139 nano-trading 243 Nation of Islam 291 national debt 45, 226, 227 National Health Service 115 National Labor Relations Board 120 National Security Administration 136 nationalisation 50 nationalism 7, 8, 44, 289 natural resources 58, 59, 123, 240, 241, 244, 246, 251 nature 56 alienation from 263 capital’s conception of 252 capital’s relation to 246–63 commodification of 59 domination of 247, 272 Heidegger on 59, 250 Polanyi on 58 power over 198 process-thing duality 73 and technology 92, 97, 99, 102 Nazis 151 neoclassical economists 109 neocolonialism 143, 201 neoliberal era 128 neoliberal ethic 277 neoliberalisation x, 48 neoliberalism xiii, 68, 72, 128, 134, 136, 176, 191, 234, 281 capitalism 266 consensus 23 counter-revolution 82, 129, 159, 165 political programme 199 politics 57 privatisation 235 remedies xi Nevada, housing in 77 ‘new economy’ (1990s) 144 New York City 141, 150 creativity 245 domestic labour in 196 income inequality 164 rental markets 22 social reproduction 195 Newton, Isaac 70 NGOs (non-governmental organisations) 189, 210, 284, 286, 287 Nike 31 Nkrumah, Kwame 291 ‘non-coincidence of interests’ 25 Nordic countries 165 North America deindustrialisation in 234 food grain exports 148 indigenous population and property rights 39 women in labour force 230 ‘not in my back yard’ politics 20 nuclear weapons 101 Nyere, Julius 291 O Obama, Barack 167 occupational safety and health 72 Occupy movement 280, 292 Ohlin Foundation 143 oil cartel 252 companies 77, 131 ‘Seven Sisters’ 131 embargo (1973) 124 ‘peak oil’ 251–2, 260 resources 123, 240, 257 oligarchy, oligarchs 34, 143, 165, 221, 223, 242, 245, 264, 286, 292 oligopoly 131, 136, 138 Olympic Games 237–8 oppositional movements 14, 162, 266–7 oppression 193, 266, 288, 297 Orwell, George 213 Nineteen Eighty-Four 202 overaccumulation 154 overheating 228 Owen, Robert 18, 184 Oxfam xi, 169–70 P Paine, Tom: Rights of Man 285 Paris 160 riots (1968) x patents 139, 245, 251 paternalism 165, 209 patriarchy 7 Paulson, Hank 47 pauperisation 104 Peabody, George 18 peasantry ix, 7, 107, 117, 174, 190, 193 revolts 202 pensions 134, 165, 230 rights 58, 67–8, 84, 134 people of colour: disposable populations 111 Pereire, Emile 239 pesticides 255, 258 pharmaceuticals 95, 121, 123, 136, 139 Philanthropic Colonialism 211 philanthropy 18, 128, 189, 190, 210–11, 245, 285 Philippines 115, 196 Picasso, Pablo 140–41, 187, 240 Pinochet, Augusto x Pittsburgh 150, 159, 258 planned obsolescence 74 plutocracy xi, xii, 91, 170, 173, 177, 180 Poland 152 Polanyi, Karl 56, 58, 60, 205–7, 210, 261 The Great Transformation 56–7 police 134 brutality 266 capacities and powers 43 powers xiii, 43, 52 repression 264, 280 surveillance and violence 264 violence 266, 280 police-state 203, 220 political economy xiv, 54, 58, 89, 97, 179–80, 182, 201, 206–9 liberal 204, 206, 209 political parties, incapable of mounting opposition to the power of capital xii political representation 183 pollutants 8, 246, 255 pollution 43, 57, 59, 60, 150, 250, 254, 255, 258 Pontecorvo, Gillo 288 Ponzi schemes 21, 53, 54, 243 population ageing 223, 230 disposable 108, 111, 231, 264 growth 107–8, 229, 230–31, 242, 246 Malthus’s principle 229–30 Portugal 161 post-structuralism xiii potlatch system 33 pounds sterling 46 poverty 229 anti-poverty organisations 286–7 and bourgeois reformism 167 and capital 176 chronic 286 eradication of 211 escape from 170 feminisation of 114 grants 107 and industrialisation 123 and population expansion 229 and unemployment 170, 176 US political movement denies assistance to the poor 292–3 and wealth 146, 168, 177, 218, 219, 243 world xi, 170 power accumulation of 33, 35 of capital xii, 36 class 55, 61, 88, 89, 97, 99, 110, 134, 135, 221, 279 computer 105 and currencies 46 economic 142, 143, 144 global 34, 170 the house as a sign of 15–16 of labour see under labour; of merchants 75 military 143 and money 25, 33, 36, 49, 59, 60, 62, 63, 65–6, 245, 266 monopoly see monopoly power; oligarchic 292 political 62, 143, 144, 162, 171, 219, 292 purchasing 105, 107 social 33, 35, 55, 62, 64, 294 state 42–5, 47–52, 72, 142, 155–9, 164, 209, 295 predation, predators 53, 54, 61, 67, 77, 84, 101, 109, 111, 133, 162, 198, 212, 254–5 price fixing 53, 118, 132 price gouging 132 Price, Richard 226, 227, 229 prices discount 133 equilibrium in 118 extortionate 84 food 244, 251 housing 21, 32, 77 land 77, 78, 150 low 132 market 31, 32 and marketplace anarchy 118 monopoly 31, 72, 139, 141 oil 251, 252 property 77, 78, 141, 150 supermarket 6 and value 31, 55–6 private equity firms 101, 162 private equity funds 22, 162 private property and the commons 41, 50, 57 and eradication of usufructuary rights 41 and individual appropriation 38 and monopoly power 134–5, 137 social bond between human rights and private property 39–40 and the state 47, 50, 58, 59, 146, 210 private property rights 38–42, 44, 58, 204, 252 and collective management 50 conferring the right to trade away that which is owned 39 decentralised 44 exclusionary permanent ownership rights 39 and externality effects 44 held in perpetuity 40 intellectual property rights 41 microenterprises endowed with 211 modification or abolition of the regime 14 and nature 250 over commodities and money 38 and state power 40–41, 42–3 underpinning home ownership 49 usufructuary rights 39 privatisation 23, 24, 48, 59, 60, 61, 84, 185, 235, 250, 253, 261, 262, 266 product lines 92, 107, 219, 236 production bourgeois 1 falling value of 107 immaterial 242 increase in volume and variety of 121 organised 2 and realisation 67, 79–85, 106, 107, 108, 173, 177, 179, 180, 221, 243 regional crises 151 workers’ dispossession of own means of 172 productivity 71, 91, 92, 93, 117, 118, 121, 125, 126, 132, 172, 173, 184, 185, 188, 220, 239 products, compared with commodities 25–6 profitability 92, 94, 98, 102, 103, 104, 106, 112, 116, 118, 125, 147, 184, 191–2, 240, 252, 253, 256, 257 profit(s) banking 54 as capital’s aim 92, 96, 232 and capital’s struggle against labour 64, 65 and competition 93 entrepreneurs 24, 104 falling 81, 107, 244 from commodity sales 71 and money capital 28 monopoly 93 rate of 79, 92 reinvestment in expansion 72 root of 63 spending of 15 and wage rates 172 proletarianisation 191 partial 175, 190, 191 ‘property bubble’ 21 property market boom (1920s) 239 growth of 50 property market crashes 1928 x, 21 1973 21 2008 21–2, 54, 241 property rights 39, 41, 93, 135 see also intellectual property rights; private property property values 78, 85, 234 ‘prosumers’ 237 Proudhon, Pierre-Joseph 183 Prozac 248 public goods 38 public utilities 23, 60, 118, 132 Q quantitative easing 30, 233 R R&D ix race 68, 116, 165, 166, 291 racial minorities 168 racialisation 7, 8, 62, 68 racism 8 Rand, Ayn 200 raw materials 16, 17, 148, 149, 154 Reagan, Ronald x, 72 Speech at Westminster 201 Reagan revolution 165–166 realisation, and production 67, 79–85, 106, 107, 108, 173, 177, 179, 180, 221, 243 reality contradiction between reality and appearance 4–6 social 27 Reclus, Elisée 140 regional development 151 regional volatility 154 Reich, Robert 123, 188 religion 7 religious affiliation 68 religious hatreds and discriminations 8 religious minorities 168 remittances 175 rent seeking 132–3, 142 rentiers 76, 77, 78, 89, 150, 179, 180, 241, 244, 251, 260, 261, 276 rents xii, 16–19, 22, 32, 54, 67, 77, 78, 84, 123, 179, 241 monopoly 93, 135, 141, 187, 251 repression 271, 280 autocratic 130 militarised 264 police-state 203 violent 269, 280, 297 wage 158, 274 Republican Party (US) 145, 280 Republicans (US) 167, 206 res nullius doctrine 40 research and development 94, 96, 187 ‘resource curse’ 123 resource scarcity 77 revolution, Fanon’s view of 288 revolutionary movements 202, 276 Ricardo, David 122, 244, 251 right, the ideological and political assault on the left xii; response to universal alienation 281 ‘rights of man’ 40, 59, 213 Rio de Janeiro 84 risk 17, 141, 162, 219, 240 robbery 53, 57, 60, 63, 72 robotisation 103, 119, 188, 295 Rodney, Walter 291 romantic movement 261 Roosevelt, Theodore 131, 135 Four Freedoms 201 Rousseau, Jean-Jacques 213, 214 Ruhr, Germany 150 rural landscapes 160–61 Russia 154 a BRIC country 170, 228 collapse of (1989) 165 financial crisis (1998) 154, 232 indebtedness 152 local famine 124 oligarchs take natural resource wealth 165 S ‘S’ curve 225, 230–31 Saint-Simon, Claude de Rouvroy, comte de 183 sales 28, 31, 187, 236 San Francisco 150 Santiago, Chile: street battles (2006–) 185 Sao Paulo, Brazil 129, 195 savings the house as a form of saving 19, 22, 58 loss of 20, 58 private 36 protecting the value of 20 Savings and Loan Crisis (USA from 1986) 18 savings accounts 5, 6 Scandinavia 18, 85, 165 scarcity 37, 77, 200, 208, 240, 246, 260, 273 Schumpeter, Joseph 98, 276 science, and technology 95 Seattle 196 Second Empire Paris 197 Second World War x, 161, 234 Securities and Exchange Commission 120, 195 security xiii, 16, 121, 122, 165, 205, 206 economic 36, 153 food 253, 294, 296 job 273 national 157 Sen, Amartya 208–11, 281 Development as Freedom 208–9 senior citizens 168 Seoul 84 serfdom 62, 209 sexual hatreds and discriminations 8 Shanghai 153, 160 share-cropping 62 Sheffield 148, 149, 159, 258 Shenzhen, China 77 Silicon Valley 16, 143, 144, 150 silver 27–31, 33, 37, 57, 233, 238 Simon, Julian 246 Singapore 48, 123, 150, 184, 187, 203 slavery 62, 202, 206, 209, 213, 268 slums ix, 16, 175 Smith, Adam 98, 125–6, 157, 185, 201, 204 ‘invisible hand’ 141–2 The Wealth of Nations 118, 132 Smith, Neil 248 social distinction 68, 166 social inequality 34, 110, 111, 130, 171, 177, 180, 220, 223, 266 social justice 200, 266, 268, 276 social labour 53, 73, 295 alienated 64, 66, 88 and common wealth 53 creation of use values through 36 expansion of total output 232 household and communal work 296 immateriality of 37, 233 and money 25, 27, 31, 42, 55, 88, 243 productivity 239 and profit 104 and value 26, 27, 29, 104, 106, 107, 109 weakening regulatory role of 109, 110 social media 99, 136, 236–7, 278–9 social movements 162–3 social reproduction 80, 127, 182–98, 218, 219, 220, 276 social security 36, 165 social services 68 social struggles 156, 159, 165, 168 social value 26, 27, 32, 33, 55, 172, 179, 241, 244, 268, 270 socialism 215 democratic xii; ‘gas and water’ 183 socialism/communism 91, 269 socialist revolution 67 socialist totalitarianism 205 society capitalist 15, 34, 81, 243, 259 civil 92, 122, 156, 185, 189, 252 civilised 161, 167 complex 26 demolition of 56 and freedom 205–6, 210, 212 hope for a better society 218 industrial 205 information 238 market 204 post-colonial 203 pre-capitalist 55 primitive 57 radical transformation of 290 status position in 186 theocratic 62 women in 113 work-based 273 world 204 soil erosion 257 South Africa 84–5, 152, 169 apartheid 169, 202, 203 South Asia labour 108 population growth 230 software programmers and developers 115, 116 South Korea 123, 148, 150, 153 South-East Asia 107–8 crisis (1997–8) 154, 232, 241 sovereign debt crises 37 Soviet Bloc, ex-, labour in 107 Soviet Union 196, 202 see also Russia Spain xi, 51, 161 housing market crash (2007–9) 82–3 spatio-temporal fixes 151–2, 153, 154, 162 spectacle 237–8, 242, 278 speculative bubbles and busts 178 stagnation xii, 136, 161–2, 169 Stalin, Joseph 70 standard of life 23, 175 starvation 56, 124, 246, 249, 260, 265 state, the aim of 156–7 brutality 266, 280 and capital accumulation 48 and civil society 156 curbing the powers of capital as private property 47 evolution of the capitalist state 42 and externality effects 44 guardian of private property and of individual rights 42 and home ownership 49–50 interstate system 156, 157 interventionism 193, 205 legitimate use of violence 42, 44, 45, 51, 88, 155, 173 loss of state sovereignty xii; and money 1, 45–6, 51, 173 ‘nightwatchman’ role 42, 50 powers of 42–5, 47–52, 57–8, 65, 72, 142, 155–9, 209, 295 and private property 47, 50, 58, 59, 146, 210 provision of collective and public goods 42–3 a security and surveillance state xiii; social democratic states 85 war aims 44 state benefits 165 state regulatory agencies 101 state-finance nexus 44–5, 46–7, 142–3, 156, 233 state-private property nexus 88–9 steam engine, invention of the 3 steel industry 120, 121, 148, 188 steel production 73–4 Stiglitz, Joseph 132–4 stock market crash (1929) x Stockholm, protests in (2013) 171, 243 strikes 65, 103, 124 sub-prime mortgage crisis 50 suburbanisation 253 supply and demand 31, 33, 56, 106 supply chain 124 supply-side remedies xi supply-side theories 82, 176 surplus value 28, 40, 63, 73, 79–83, 172, 239 surveillance xiii, 94, 121, 122, 201, 220, 264, 280, 292 Sweden 166, 167 protests in (2013) 129, 293 Sweezy, Paul 136 swindlers, swindling 45, 53, 57, 239 ‘symbolic analysts’ 188 Syntagma Square, Athens 266, 280 T Tahrir Square, Cairo 266 Taipei, Taiwan 153 Taiwan 123, 150, 153 Taksim Square, Istanbul 266, 280 Tanzania 291 tariffs 137 taxation 40, 43, 47, 67, 84, 93–4, 106, 133, 150, 155, 157, 167, 168, 172, 190 Taylor, Frederick 119, 126 Taylorism 103 Tea Party faction 205, 280, 281, 292 technological evolution 95–6, 97, 101–2, 109 technological imperatives 98–101 technological innovation 94–5 technology changes involving different branches of state apparatus 93–4 communicative technologies 278–9 and competition 92–3 constraints inhibiting deployment 101 culture of 227, 271 definition 92, 248 and devaluation of commodities 234 environmental 248 generic technologies 94 hardware 92, 101 humanising 271 information 100, 147, 158, 177 military 93, 95 monetary 109 and nature 92, 97, 99, 102 organisational forms 92, 99, 101 and productivity 71 relation to nature 92 research and development 94 and science 95 software 92, 99, 101 a specialist field of business 94 and unemployment 80, 103 work and labour control 102–11 telephone companies 54, 67, 84, 278 Tennessee 148 Teresa, Mother 284 Thatcher, Margaret (later Baroness) x, 72, 214, 259 Thatcherism 165 theft 53, 60, 61, 63 Thelluson, Peter 226, 227 think tanks 143 ‘Third Italy’ 143 Third World debt crisis 240 Toffler, Alvin 237 tolls 137 Tönnies, Ferdinand 122, 125 tourism ix, 16, 140, 141, 187, 236 medical 139 toxic waste disposal 249–50, 257 trade networks 24 trade unions xii, 116, 148, 168, 176, 184, 274, 280 trade wars 154 transportation 23, 99, 132, 147–8, 150, 296 Treasury Departments 46, 156 TRIPS agreement 242 tropical rainforest 253 ‘trust-busting’ 131 trusts 135 Turin, Italy 150 Turkey 107, 123, 174, 232, 280, 293 Tuscany, Italy 150 Tutu, Archbishop Desmond 284 Twitter 236 U unemployment 37, 104, 258, 273 benefits 176 deliberately created 65, 174 high xii, 10, 176 insurance 175 and labour reserves 175, 231 and labour-saving technologies 173 long-term 108, 129 permanent 111 echnologically induced 80, 103, 173, 274 uneven geographical developments 178, 296 advanced and underserved regional economies 149–50 and anti-capitalist movements 162 asset bubbles 243 and capital’s reinvention of itself 147, 161 macroeconomic processes of 159 masking the true nature of capital 159–60 and technological forms 219 volatility in 244 United Fruit 136 United Kingdom income inequality in 169; see also Britain United Nations (UN) 285 United States aim of Tea Party faction 280 banking 158 Bill of Rights 284 Britain lends to (nineteenth century) 153 capital in (1990s) 154 Constitution 284 consumption level 194 global reserve currency 45–6 growth 232 hostility towards state interventions 167 House of Representatives 206 human rights abuses 202 imperial power 46 indebtedness of students in 194 Indian reservations 249 interstate highway system 239 jobless recoveries after recession 172–3 liberty and freedom rhetoric 200–201, 202 Midwest ‘rust belt’ 151 military expenditures 46 property market crashes x, 21–2, 50, 54, 58, 82–3 racial issues 166 Savings and Loan Crisis (from 1986) 18 social mobility 196 social reproduction 196–7 solidly capitalist 166 steel industry 120 ‘symbolic analysts’ 188 ‘trust-busting’ 131 unemployment 108 wealth distribution 167 welfare system 176 universal suffrage 183 urbanisation 151, 189, 228, 232, 239, 247, 254, 255, 261 Ure, Andrew 119 US Congress 47 US dollar 15, 30, 45–6 US Executive Branch 47 US Federal Reserve xi, 6, 30, 37, 46, 47, 49, 132, 143, 233 monetary policy 170–71 US Housing Act (1949) 18 US Treasury 47, 142, 240 use values collectively managed pool of 36 commodification of 243 commodities 15, 26, 35 common wealth 53 creation through social labour 36 and entrepreneurs 23–4 and exchange values 15, 35, 42, 44, 50, 60, 65, 88 and housing 14–19, 21–2, 23, 67 and human labour 26 infinitely varied 15 of infrastructural provision 78 loss of 58 marketisation of 243 monetisation of 243 of money 28 privatised and commodified 23 provision of 111 and revolt of the mass of the people 60 social demand for 81 usufructuary rights 39, 41, 59 usury 49, 53, 186, 194 utopianism 18, 35, 42, 51, 66, 119, 132, 183, 184, 204, 206–10, 269, 281, 282 V value(s) commodity 24, 25 failure to produce 40 housing 19, 20, 22 net 19 production and realisation of 82 production of 239 property 21 relation between money and value 27, 35 savings 20 storing 25, 26, 35 see also asset values; exchange values; social value; use values value added 79, 83 Veblen, Thorstein: Theory of the Leisure Class 274 Venezuela 123, 201 Vietnam, labour in 108 Vietnam War 290 violence 53, 57, 72, 204–5, 286 against children 193 against social movements 266 against women 193 colonial 289–90, 291 and contemporary capitalism 8 culture of 271 of dispossession 58, 59 in a dystopian world 264 and humanism 286, 289, 291 of the liberation struggle 290 militarised 292 as the only option 290–91 political 280 in pursuit of liberty and freedom 201 racialised 291 state’s legitimate use of 42, 44, 45, 51, 88, 155, 173 of technology 271 and wage labour 207 virtual ecological transfer 256 Volcker, Paul 37 W wages 103 basic social wage 103 falling 80, 82 for housework 115, 192–3 low xii, 114, 116, 186, 188 lower bound to wage levels 175 non-payment of 72 and profits 172 reduction in 81, 103, 104, 135, 168, 172, 176, 178 rising 178 and unskilled labour 114 wage demands 150, 274 wage levels pushed up by labour 65 wage rates 103, 116, 172, 173 wage repression 158–9 weekly 71 see also income Wall Street criticised by a congressional committee 239–40 illegalities practised by 72, 77 and Lebed 195 new information-processing technologies 100 Wall Street Crash (1929) x, 47 Wall-E (film) 271 Walmart xii, 75, 84, 103, 131 war on terror 280 wars 8, 60, 229 currency 154 defined 44 monetisation of state war-making activities 44–5 privatisation of war making 235 resource 154, 260 and state aims 44 state financing of 32, 44, 48 and technology 93 trade 154 world 154 water privatisation 235 wave theory 70 wave-particle duality 70 wealth accumulation of 33, 34, 35, 157, 205 creation of 132–3, 142, 214 disparities of 164–81 distribution of 34, 167 extraction from non-productive activities 32 global 34 the house as a sign of 15–16 levelling up of per capita wealth 171 and poverty 146, 168, 177, 218, 219, 243 redistribution of 9, 234, 235 social 35, 53, 66, 157, 164, 210, 251, 265, 266, 268 taking it from others 132–3 see also common wealth weather futures 60 Weber, Max 122, 125 Weimar Republic 30 welfare state 165, 190, 191, 208 Wells Fargo 61 West Germany 153, 154, 161 Whitehead, Alfred North 97 Wilson, Woodrow 201 Wolf, Martin 304n2 Wollstonecraft, Mary: A Vindication of the Rights of Woman 285 women career versus family obligations 1–2 disposable populations 111 exploitation of 193 housework versus wage labour 114–15 oppression against 193 social struggle 168 trading of 62 violence against 193 in the workforce 108, 114, 115, 127, 174, 230 women’s rights 202, 218 workers’ rights 202 working classes and capital 80 consumer power 81 crushing organisation 81 education 183, 184 gentrified working-class neighbourhoods ix; housing 160 living conditions 292 wage repression and consumption 158–9 working hours 72, 104–5, 182, 272–5, 279 World Bank 16, 24, 100, 186, 245 World Trade Organization 138, 242 WPA programmes (1930s) 151 Wright, Frank Lloyd: Falling Water 16 Wriston, Walter 240 Y YouTube 236 Yugoslavia, former 174 Z Zola, Émile 7


pages: 382 words: 120,064

Bank 3.0: Why Banking Is No Longer Somewhere You Go but Something You Do by Brett King

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3D printing, additive manufacturing, Albert Einstein, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, asset-backed security, augmented reality, barriers to entry, bitcoin, bounce rate, business intelligence, business process, business process outsourcing, call centre, capital controls, citizen journalism, Clayton Christensen, cloud computing, credit crunch, crowdsourcing, disintermediation, en.wikipedia.org, George Gilder, Google Glasses, high net worth, I think there is a world market for maybe five computers, Infrastructure as a Service, invention of the printing press, Jeff Bezos, jimmy wales, London Interbank Offered Rate, M-Pesa, Mark Zuckerberg, mass affluent, microcredit, mobile money, more computing power than Apollo, Northern Rock, Occupy movement, optical character recognition, performance metric, platform as a service, QWERTY keyboard, Ray Kurzweil, recommendation engine, RFID, risk tolerance, self-driving car, Skype, speech recognition, stem cell, telepresence, Tim Cook: Apple, transaction costs, underbanked, web application

Mainstream financial institutions generally shy away from developing economies because of the premise that low-income populations do not save and are bad borrowers. However, the microfinance revolution effectively shattered these myths by demonstrating that when poor households have access to financial services, not only do they save, they also have high repayment rates and low default rates when they borrow. Muhammad Yunus, the founder of Grameen Bank in Bangladesh, was awarded the Nobel Peace Prize in 2006 for his efforts to revolutionise microcredit on the subcontinent. Beyond microfinance, however, one of the largest sources of income for developing economies these days is the large population of expatriates living and working overseas who remit funds back to their families in their home countries. Peer-to-peer money remittances enable an expatriated worker to send money across international borders to family or friends. According to the World Bank, 175 million migrant workers each year send billions of dollars’ worth of international remittances to family and friends, many of whom do not have bank accounts.

Given the limited number of network operators in each market, banks should move quickly in case they get locked out by exclusivity agreements or other considerations. To illustrate, the Bank of the Philippine Islands (BPI) and Globe Telecom have recently announced the launch of a mobile microfinance institution, PSBI (Pilipinas Savings Bank).23 PSBI is a traditional bank that has been converted for use in the mobile and microcredit arena. Secondly, rather than treat mobile payments as a threat, banks need to see it as an opportunity to open otherwise unprofitable markets for low-income segments. Banks will need strong partners and a strong platform to succeed. If you want to bank the world, the mobile phone is the easiest and cheapest way to do it, as Kenya and the Philippines have shown. What does the future hold?

LIBOR: London Interbank Offered Rate LinkedIn: An online social network for business professionals. Metcalfe’s Law: Attributed to Robert Metcalfe, this law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2). MFI: Microfinance Institution—an alternate form of bank found in developing countries which provides microcredit lending. MIRC: Magnetic Ink Character Recognition Mobile Portal: A website designed specifically for mobile phone interfaces and mini-browsers. Mobile Money: Bank-like services delivered over a mobile device to enable payments between two parties; successful providers include M-Pesa, Edy, G-CASH, MTN Money, T-money, Edy, Suica. Mobile Wallet: An electronic account, dominated in a currency, held on a mobile phone that can be used to store and transfer value.


pages: 483 words: 134,377

The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor by William Easterly

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air freight, Andrei Shleifer, battle of ideas, Bretton Woods, British Empire, business process, business process outsourcing, Carmen Reinhart, clean water, colonial rule, correlation does not imply causation, Daniel Kahneman / Amos Tversky, Deng Xiaoping, desegregation, discovery of the americas, Edward Glaeser, en.wikipedia.org, European colonialism, Francisco Pizarro, fundamental attribution error, germ theory of disease, greed is good, income per capita, invisible hand, James Watt: steam engine, Jane Jacobs, John Snow's cholera map, Joseph Schumpeter, Kenneth Rogoff, M-Pesa, microcredit, Monroe Doctrine, oil shock, place-making, Ponzi scheme, risk/return, road to serfdom, Silicon Valley, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, Thomas L Friedman, urban planning, urban renewal, Washington Consensus, World Values Survey, young professional

The number of mobile-phone subscribers in Africa has quintupled in the last seven years, to reach nearly 500 million.41 They have been applied to unexpected uses. Just as cell phones themselves bypassed dysfunctional land lines in Africa, Africans are using their cell phones to bypass inefficient state-regulated traditional banks. The firm MPESA in Kenya originally intended to be a microcredit organization but found that its customers wanted to use the technology they devised for repaying microcredits for something else. MPESA had stumbled by chance into a huge market for financial transfers by cell phone. Three years after its founding in March 2007, MPESA was reaching 40 percent of Kenya’s adult population.42 MPESA now processes more transfers within Kenya than Western Union does internationally.43 Outsiders tend to overlook another less sexy but still transformative technology in Africa: motor vehicles.

He completes all these transactions with neither a written contract nor a notary certification nor any collateral. During his stay in New York, his family back in Senegal might need food or money. The merchant simply calls another Mouride merchant in Sandaga who can dispense cash to the family the same day in a small Sandaga shop. The Mourides have built a system that allows instantaneous and nearly costless financial transactions. While the aid establishment is supporting microcredit projects around the world with mixed results, almost everyone has overlooked the Mourides, who can pride themselves on decades of successful microfinance. Their dense network also serves for exchange of market information: one Mouride merchant got a tip through the network to buy plastic storks in New York City’s Chinatown to sell to German tourists in the French city of Strasbourg, knowing that Strasbourg’s merchants would not be able to match the price.16 The Mouride network has made possible prosperity for many of its members, both back in Senegal and abroad.


Making Globalization Work by Joseph E. Stiglitz

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affirmative action, Andrei Shleifer, Asian financial crisis, banking crisis, barriers to entry, Berlin Wall, business process, capital controls, central bank independence, corporate governance, corporate social responsibility, currency manipulation / currency intervention, Doha Development Round, Exxon Valdez, Fall of the Berlin Wall, Firefox, full employment, Gini coefficient, global reserve currency, happiness index / gross national happiness, illegal immigration, income inequality, income per capita, incomplete markets, Indoor air pollution, informal economy, inventory management, invisible hand, Kenneth Rogoff, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, microcredit, moral hazard, North Sea oil, offshore financial centre, oil rush, open borders, open economy, price stability, profit maximization, purchasing power parity, quantitative trading / quantitative finance, race to the bottom, reserve currency, rising living standards, risk tolerance, Silicon Valley, special drawing rights, statistical model, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, trickle-down economics, union organizing, Washington Consensus

At a Davos panel on trade, the contrast in views between the developed and developing countries was especially marked. A former World Trade Organization official said that if trade liberalization—the lowering of tariffs and other trade barriers—had not fully delivered on its promise of enhanced growth and reduced poverty, it was the fault of the developing countries, which needed to open their markets more to free trade and globalize faster. But an Indian running a micro-credit bank stressed the downside of free trade for India. He spoke of peanut farmers who could not compete with imports of Malaysian palm oil. He said it was increasingly difficult for small and medium-sized businesses to get loans from banks. This was not surprising. Around the world, countries that have opened up their banking sectors to large international banks have found that those banks prefer to deal with other multinationals like Coca-Cola, IBM, and Microsoft.

A fourth pillar is communities, people working together, often with help from government and nongovernmental organizations. In many developing countries, much important collective action is at the local level. In Bali, as in much of Asia, irrigation for agriculture is provided by a network of canals. These are maintained by the community which ensures that the water is shared fairly among the villages and villagers. The story of the Grameen micro-credit bank in rural Bangladesh, which gives small loans to poor rural women—who have a far better repayment rate than the rich urban borrowers—is well known. These schemes have been so successful because they entail groups of women who take responsibility for one another helping one another out and 52 MAKING GLOBALIZATION WORK ensuring that each pays what is due. 3 ° Its sister organization BRAG (originally the Bangladesh Rural Advancement Committee), also a nongovernmental organization, is even larger than Grameen, and both have branched out into a wide variety of activities.

., 56, 300n G-8, 15, 209, 227 Garcia Merou, Martin, 213 GDP, xviii, 44, 153, 154, 181, 276, 322n, 324n of Argentina, 212, 222, 240 as measurement of development success, 45, 50, 130 of Moldova, 211 ratio of debt to, 218 of Russia, 234, 242 General Agreement on Tariffs and Trade (GATT), 75, 315n Uruguay Round, 75-76, 77-78, 84, 88, 105, 274-75, 306n General Electric, 65, 191, 201 General Motors, 65, 172, 187, 189, 279 generic drugs, 78, 104, 120-22, 315n-16n genetically modified foods, 94-95, 129 genetic structure, patents on, 13-14 Geneva, Switzerland, 278, 305n Georgia (nation), 140 Georgia (state), 192 Germany: greenhouse gases from, 172 tariffs of, 303n Treaty of Versailles and, 239 Venezuelan naval expedition oh 213 Ghana, 41, 331n Giffen, James, 139 INDEX Gilbert, Walter, 314n Gini coefficient, 294n Glacier National Park, 161 global economy, 5, 244 instability and volatility of, ix, xi, 245-46 legal framework for, 207-8 as propped up by U.S. purchasing power, 251-52, 261 as weakened by global reserve system, 250-54 global financial institutions, xii, xv, 3-4, 236 accountability oh 19, 283-84 democratic deficit in, 21 flawed system oh 17-18 see also International Monetary Fund; World Bank global financial system, see global reserve system global greenback system, 260-68, 335n, 336n administration oh 266 allocation policy oh 266-68 cycle of crisis broken by, 264-65 functions oh 262-63 stability as increased by, 263-64 globalization, 5-6 backlash against, 23, 269, 288 challenges to, 273-76 corporations at center oh xii-xiv, xv, 188, 197-98 democratization of, 269-92 exploitation of resources and, 149 first modern protest against, 7 hope oh 4 nation-state and, 19-24 political forces and, xiii-xiv, xviii, 4, 269, 291 reform oh 6-7, 13-19 scope oh 4, 56-59 two faces oh 7-13 Globalization and Its Discontents (Stiglitz), ix, x, xii, xiii, 293n Global Leadership Forum, 320n Global Monetary Authority, 335n global reserve system, 245-68, 277, 281 as cause of instability, 254-60 decline in aggregate demand as result oh 250-51, 252-53 diversification of currency in, 254-56, 259 dollar as major currency for, 245, 246, 248-49, 253 downward bias oh 262 347 low interest rate on dollar in, 245, 249-50, 255-56, 261 regional cooperatives and, 260-61 reforms oh 260-68, 286 as self-defeating, 254-55, 263 U.S. as major beneficiary oh 250 see also global greenback system global social contract, 285-87 global warming, 17, 21, 24, 161-86, 280, 284, 285, 288, 310n common tax proposal for, 181-84 as downplayed by GWB, 168 incontrovertible facts about, 166 industrialization and, 171-72, 173 privatization and, 163 and rising sea levels, 164-65, 167 Global Witness, 156 gold, as historical currency, 246 governance, 54-56, 128 see also corporate governance government, 47 balance between market and, xv cartel creation and, 201 development role of East Asian, 29, 30, 31-32, 45-46 downscaling oh 17 educational investment by, 28 environmental protection by, 197 equity promotion by, 27-28 foreign investment managed by, 33 infrastructure and, 27-28, 49 regulation and, 28 unemployment and, 253, 273 Grameen micro-credit bank, 51-52 "Grand Bargain," 77 grants, 14 Great Britain, 40, 42 Egypt occupied by, 214 energy efficiency oh 170 tariffs of, 303n Venezuelan naval expedition oh 213 Great Depression, xvii-xviii, 68, 74, 214, 236, 334n greenhouse gas emissions, 131, 161, 165, 166, 177, 183, 266, 280 from agriculture, 323n-24n deforestation and, 178-80 Rio agreement's curtailing oh 168-69 of U.S., 165, 171-74, 176 see also Kyoto Protocol Green net national product (Green NNP), 154 Green Revolution, 42, 43 348 INDEX Greenspan, Alan, 217 Grossman, Sanford J., 327n gross national happiness (GNH), 45 growth, sustainability of, 26, 36, 45 Guantanamo Bay, 151 guarantee fund, 124 Guatemala, 78 Gulf Stream, 166-67 Guyana, 307n, 331n Haile Selassie, 229 Haiti, 31, 307n Halonen, Tarja Kaarina, 8 Hardin, Garrett, 322n Harvard University, 242 Hastert, J.


The Future of Money by Bernard Lietaer

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agricultural Revolution, banks create money, barriers to entry, Bretton Woods, clean water, complexity theory, dematerialisation, discounted cash flows, diversification, fiat currency, financial deregulation, financial innovation, floating exchange rates, full employment, George Gilder, German hyperinflation, global reserve currency, Golden Gate Park, Howard Rheingold, informal economy, invention of the telephone, invention of writing, Lao Tzu, Mahatma Gandhi, means of production, microcredit, money: store of value / unit of account / medium of exchange, Norbert Wiener, North Sea oil, offshore financial centre, pattern recognition, post-industrial society, price stability, reserve currency, Ronald Reagan, seigniorage, Silicon Valley, South Sea Bubble, the market place, the payments system, trade route, transaction costs, trickle-down economics, working poor

It uses a sound and simple accounting system that suits the community into which it was introduced. It has the support of important individuals in the community as well as broad community interest. Although future developments of the system are for the community itself to decide, the system even at this stage allows for a substantial development in import substitution, interestfree banking, micro-credits, and funding of health programs and education through the Bia Bank. The Bia Kud Chum Community Currency System is the first system of its type in South East Asia. What is technically original here is the combination of a paper currency technology with a group system of mutual credits (each account Unit represents in fact a group of coresponsible individuals). What is also significant is that this Thai NGO project is a direct result of co-operation and cross-fertilisation of Dutch, Canadian and Mexican complementary currency expertise, funded by a Japanese non- profit.

Market economies presuppose price variability, for instance prices dropping automatically to clear what is on offer. Theory shows that true market economies require large numbers of small suppliers and consumers, and low barriers to entry. These perfect conditions are rarely prevailing in today's economy. The opposite of a market price is a price fixed by some authority - individual, government or corporate. Micro-credit: Refers to loans in conventional national currency for small amounts to small-scale entrepreneurs. The Grameen Bank in Bangladesh has been a model of success in such activities. Monetarism: Economic theory which posits that only the quantity of money determines prices, and therefore that it is counterproductive to use monetary adjustment tools for purposes other than inflation control. Monetarism also assumes that money is 'neutral', in the sense that neither production nor distribution is affected by money.


pages: 346 words: 92,984

The Lucky Years: How to Thrive in the Brave New World of Health by David B. Agus

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3D printing, active transport: walking or cycling, Affordable Care Act / Obamacare, Albert Einstein, butterfly effect, clean water, cognitive dissonance, crowdsourcing, Danny Hillis, Drosophila, Edward Lorenz: Chaos theory, en.wikipedia.org, epigenetics, Kickstarter, medical residency, meta analysis, meta-analysis, microbiome, microcredit, mouse model, Murray Gell-Mann, New Journalism, pattern recognition, personalized medicine, phenotype, placebo effect, publish or perish, randomized controlled trial, risk tolerance, statistical model, stem cell, Steve Jobs, Thomas Malthus, wikimedia commons

Famous in his native country of Bangladesh and world renowned as a civic leader and successful social entrepreneur and economist, Yunus was awarded the Nobel Peace Prize in 2006 for founding the Grameen Bank and pioneering the practice of microfinance—providing banking to entrepreneurs and small businesses that would not otherwise have access to such services. Some have called him the godfather of microcredit. What started as a passion to help “just one person each day” has grown into a global phenomenon of two hundred fifty microcredit programs in nearly one hundred countries. His story exemplifies not only the power of blending art and science, but also catering to people’s basic needs, intuitions, and motivations in pursuit of innovation—and a healthier tomorrow. Yunus initially got into the business during the famine of 1974, when dying Bangladeshi people began to beg for help from wealthier citizens in the city of Dhaka.


pages: 651 words: 135,818

China into Africa: trade, aid, and influence by Robert I. Rotberg

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barriers to entry, BRICs, colonial rule, corporate governance, Deng Xiaoping, energy security, European colonialism, failed state, global supply chain, global value chain, income inequality, Khartoum Gordon, labour market flexibility, land reform, megacity, microcredit, offshore financial centre, out of africa, profit maximization, purchasing power parity, RAND corporation, Scramble for Africa, South China Sea, special economic zone, structural adjustment programs, trade route, Washington Consensus

In addition, China trained fifty Nigerian officials and medical personnel for comprehensive malaria prevention and control. Just two months after the outbreak of bird flu in Nigeria in 2006, the Chinese government donated avian influenza support materials. This gesture was repeated in November 2007, leading to an agreement between the Chinese and Nigeria, for the latter’s fight against malaria and bird flu. This new partnership also included cooperation in commercial livestock development, including microcredit financing and technology acquisition.20 13-7561-4 ch13.qxd 9/16/08 4:23 PM Page 279 China’s Expanding Relations with Nigeria 279 Several Nigerian educational institutions have established pedagogical and cultural links to China. One federal polytechnic college, for instance, has organized exhibitions on the Chinese culture and landscape and hosts frequent exchanges of cultural troupes and students.

China model, and, 182; ONCC Videsh and, 120; 288; Zimbabwe and, 261 Sudan and, 264; trade flows and, 95; International Olympics Committee, 68 transparency and, 124 International system, 297, 299, 306 Indian Ocean: development and, 144; Internet, 283 naval strategy and, 181–84 Interparliamentary exchanges, 241–42 Indian Ocean Newsletter, 173 Iran, 17, 39, 151; arms transfers and, Industrial and Commercial Bank of 176; military ties and, 159, 163, 165, China, 148 171 Information management, 238 Iraq, 59, 304; military assistance and, Infrastructure, 1, 87, 218, 272, 300; 159 ambivalence regarding, 75; capital Islam, 126, 239, 302; Union of Islamic for, 117; challenges to, 301; China Courts and, 304 model and, 298; colonialism and, 40; Israel, 263, 304; arms transfers and, 176 16-7561-4 index.qxd 9/16/08 4:25 PM Page 329 Index 329 Janjaweed militias, 256, 258; Darfur Kordofan, Sudan, 258 and, 128; oil and, 109, 113 Kurlantzick, Joshua, 217–18, 222 Japan, 3, 32; colonialism and, 116; eco- nomic growth of, 226; high pay- Labor, 258–59, 280–81, 292, 297; Angola ments and, 123; imports from, 97; and, 11; Chinese as, 2, 11, 18, 72–74; network trade and, 107; ODA and, isolation of, 76; discipline and, 122; 213; oil and, 111; Sudan and, 126; FDI and, 106; legal violations trade flows and, 95 against, 252; Nigeria and, 280, 291; Jiang Enzhu, 242 product diversification and, 102; Jiangsu International, 165 south-south trade and, 88; standards Jiang Zemin, 21, 234; hospitality of, 236; for, 290, 301 theory of the Three Represents, 237 Lagos, Nigeria, 281–86, 287 Jia Qinglin, 24 Lamu, Kenya, 131 Jibrin, Walid, 279 Landmines, 178 Jilin University, 29 Land reform, 262 Ji Pengfei, 28 Langfang, China, 178 Johnson, Douglas, 128 Language, 302; Chinese, 279; Chinese Johnson-Sirleaf, Ellen, 178 immigration and, 287; concessional Juba, Sudan, 131, 171 loan information and, 226; loan Junggar Basin, 110 information and, 218–20; in Nigeria, 281 Kabila, Laurent, 161 Latin America, 58–60; FDI and, 105; Kaduna, Nigeria, 278–79 national security and, 155; raw mate- Kajola, Ogun State, Nigeria, 276 rials and, 94 Kakiri, Uganda, 172 Lee, Henry, 5 Kano, Nigeria, 279 Lee Kuan Yew, 252 Kapiri Mposhi, Zambia, 146 Legal codes, 14 Kaunda, Kenneth, 146, 273 Legal responsibility, 253–56; human Kebbi State, 278 rights lobbying and, 264; in Sudan, Kenya, 3, 70; arms transfers to, 9, 163; 257–59, 264–66; vs. moral culpabil- Confucius Institutes in, 29; embassy ity, 251, 264; Zimbabwe and, 263–66 attacks in, 304; Japanese companies Leon, Tony, 240 in, 32; military assistance and, 161; Lesotho, 11, 70–71; Taiwan and, 211; oil and, 4, 115 visited by Chinese leaders, 28 Kenyan Pipeline Corporation, 131–32 Li Anshan, 8 Kew, Darren, 11, 272 Liao Xiaqi, 149 Khartoum, Sudan, 112–13, 124–26, 132; Li Baodong, 235 Darfur and, 128–29; military assis- Liberation movements, 25, 156–57, tance and, 160, 170, 183 232–33, 260; Chinese support of, 9, Khrushchev, Nikita, 112, 202 273, 299; political outreach to, 231 Kiir Mayardit, Salva, 239–40 Liberia, 6, 100; peacekeeping in, Kisangani, Democratic Republic of 177–78; SEZs and, 147; Taiwan Congo (Stanleyville), 157, 160 and, 211–12 16-7561-4 index.qxd 9/16/08 4:25 PM Page 330 330 Index Libya, 27, 155; arms transfers to, 163; Marsa al-Bashair, Sudan, 125, 131 military assistance and, 161, 183; oil Martial arts, 77 reserves and, 115; Taiwan and, 162; Massacres, 254; in Zimbabwe, 260–61 Zimbabwe and, 262 Matabebeland, 260 Li Chengwen, 238 Mauritania, 27, 156, 161; oil reserves Ling Guiru, 71 and, 115 Li Peng, 28, 33 Mauritius, 70, 95, 101, 106; apparel and, Lisbon, Portugal, 117 107; development and, 143; Egypt Liu Guijin, 13, 130, 170 and, 150; foreign aid and, 200; Liu Naiya, 239 Indian Ocean development and, 145; Li Xianlian, 28 SEZs and, 140, 147 Li Zhaoxing, 210 Ma Wenpu, 242 Loans, 7, 33, 80; from China, 303; to Mayardit, Salva Kiir, 128 Nigeria, 276, 278, 292; as political Mbeki, Thabo, 10, 66, 290 outreach, 235; Zimbabwe and, 262. Memoranda of Understanding (MOU): See also concessional loans with Nigeria, 275–76; on South Lobito, Angola, 120; Benguela railway Africa and, 150–51 Microcredit financing, 278 London, England, 213 Middle East, 94, 151, 155; arms transfers London Inter-Bank Offered Rate and, 176; Egypt and, 150; foreign aid (LIBOR), 119 and, 198; government oil manage- Look East policy, 261–62 ment and, 115; military ties and, 163; Louis Berger (engineering firm), 40, 206 naval strategy and, 181–83; United Luanda, Angola, 117, 120, 165 States and, 289 Lumumba, Patrice, 157 Military, 183–85, 231; aid for, 157–61; Lusaka, Zambia, 173 arms deliveries and, 175–76; bilateral assistance and, 164–66, 169–70, Macao, China, 139, 152 172–75, 183–85; Chinese, 277; Madagascar, 4, 27, 70, 95, 161 human rights abuses and, 255; liber- Madillas market, 281 ation movements and, 156–57; navy Magellan, Ferdinand, 180 and, 179–83; Nigeria and, 167–69, Maghreb region, 149 279; peacekeeping and, 176–78; Malaria, 276, 278; U.S. funding and, 303 Sudan and, 170–72, 256–58; twenty- Malawi, 2, 158; Taiwan and, 211–12 first century and, 161–64; U.S., Malaysia, 103, 264; colonialism and, 303–4; U.S.


pages: 564 words: 153,720

Uncommon Grounds: The History of Coffee and How It Transformed Our World by Mark Pendergrast

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business climate, Edward Lloyd's coffeehouse, Honoré de Balzac, land reform, microcredit, Mikhail Gorbachev, new economy, open economy, out of africa, profit motive, Ray Oldenburg, Ronald Reagan, The Great Good Place, trade route, transcontinental railway, traveling salesman, women in the workforce

This label shows that Golden Valley Farms is certified as ‘Bird-Friendly’ by the Smithsonian Migratory Bird Center. During the 1990s, environmentalists and birders created a market for “bird-friendly coffee” grown in shaded plantations that provide important habitat for migratory birds and other rain forest animals. Coffee retailer Bill Fishbein’s first visit to poverty-stricken Guatemalan farms in 1988, inspired him to found Coffee Kids, which provides micro-credit loans to promote alternative income in coffee communities. Courtesy Coffee Kids. This Fair Trade logo assures consumers that the coffee beans they pruchase were grown by democratically run cooperatives of small farms that receive a decent price for their beans. There are also other certifications and ways to help farmers. Some think that coffee addiction is no joke, though “Too Much Coffee Man” cannot endure his banal and meaningless existence without it.

By injecting life into local economies, families can diversify their income and continue farming coffee without total dependence on it. Fishbein retired from Coffee Kids in 2008, but the organization continued under the guidance of executive director Carolyn Fairman. In 2009, Coffee Kids worked with sixteen organizations in Mexico, Guatemala, Nicaragua, Costa Rica, and Peru. Projects included microcredit and savings, organic gardening and small animal production, training center development, scholarships, and health awareness programs. Similarly, Vermont-based Grounds for Health set up clinics in coffee-growing regions of Central America to test for and treat cervical cancer, a major problem among women in remote areas. The nonprofit is supported by coffee roasters and consumers. The Gates Foundation, concerned primarily with public health, realized that poor health and poverty were intimately associated with coffee.


pages: 288 words: 16,556

Finance and the Good Society by Robert J. Shiller

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bank run, banking crisis, barriers to entry, Bernie Madoff, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, cognitive dissonance, collateralized debt obligation, collective bargaining, computer age, corporate governance, Daniel Kahneman / Amos Tversky, Deng Xiaoping, diversification, diversified portfolio, Donald Trump, Edward Glaeser, eurozone crisis, experimental economics, financial innovation, full employment, fundamental attribution error, George Akerlof, income inequality, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, land reform, loss aversion, Louis Bachelier, Mahatma Gandhi, Mark Zuckerberg, market bubble, market design, means of production, microcredit, moral hazard, mortgage debt, Occupy movement, passive investing, Ponzi scheme, prediction markets, profit maximization, quantitative easing, random walk, regulatory arbitrage, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, self-driving car, shareholder value, Sharpe ratio, short selling, Simon Kuznets, Skype, Steven Pinker, telemarketer, The Market for Lemons, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, Vanguard fund, young professional, Zipcar

Gorton (2010) argues that the Federal Reserve was mistaken to have stopped calculating and publishing the M3 measure of the money supply, which included some repurchase agreements, in 2006, just before the severe nancial crisis that began in 2007. They should instead have expanded the coverage of repurchase agreements in M3, which might have helped them see the origins of the speculative bubbles and the risks of a crisis. 8. This trend was seen long before the beginnings of the nancial crisis in 2007. See Marcus (1984). 9. Yunus (2003). 10. Karlan and Zinman (2011). Banerjee and Du o (2010) report that microcredit has numerous e ects, including promoting self-control and saving on the part of the borrowers. 11. Bucks et al. (2009): Table 6B, p. A18. 12. Barr (2004). 13. Blank and Barr (2009). Chapter 4. Investment Bankers 1. Malmendier (2005: 38) quotes Cicero referring to “partes illo tempore carissimae” (shares that had a very high price at that time). 2. “Modern Banking in Europe,” Bankers’ Magazine and Statistical Register 14(3): 183–214 (1864), p. 188. 3.

The Economists’ Voice 7(3), Article 5, http://www.bepress.com/ev/vol7/iss3/art5. Kaplan, Steven N., and Antoinette Schoar. 2005. “Private Equity Performance: Returns, Persistence, and Capital Flows.” Journal of Finance 60(4):1791–823. Karlan, Dean, and Margaret A. McConnell. 2009. “Hey Look at Me: The E ect of Giving Circles on Giving.” Unpublished paper, Yale University. Karlan, Dean, and Jonathan Zinman. 2011. “Microcredit in Theory and Practice: Using Randomized Credit Scoring for Impact Evaluation.” Science 332(6035):1278–84. Kasper, Rob. 1980. “Jerry Rubin Goes Wall Street, but Still Can’t Tie a Tie.” Baltimore Sun, August 19, B1. Kat, Harry, and Faye Menexe. 2003. “Persistence in Hedge Fund Performance: The True Value of a Track Record.” Journal of Alternative Investments 5(4):66–72. Kaufman, Henry. 2005. On Money and Markets: A Wall Street Memoir.


pages: 391 words: 117,984

The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World by Jacqueline Novogratz

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access to a mobile phone, Ayatollah Khomeini, Berlin Wall, business process, business process outsourcing, clean water, failed state, Fall of the Berlin Wall, half of the world's population has never made a phone call, Hernando de Soto, Kibera, Lao Tzu, market design, microcredit, out of africa, Ronald Reagan, sensible shoes, side project, Silicon Valley, Skype, The Fortune at the Bottom of the Pyramid, transaction costs

By lending women money instead of giving handouts, we would signal our high expectations for them and give them the chance to do something for their own lives rather than waiting for the “experts” to give them things they might or might not need. I was changing. Though I’d been uncomfortable about focusing on women when I was first given the opportunity to come to Africa, I’d begun to see that if you support a woman, you support a family. I’d also learned that I definitely didn’t like the word “expert” when it came to development. I still don’t. The question for me now was whether Rwanda was ready for microcredit—were there enough people and institutions to support the idea? I also questioned whether the Grameen Bank model would work in Rwanda. Bangladesh had something this country didn’t: a history of trading and a feeling of solidarity among the people, especially since nationalism had taken root because of the war with Pakistan. Everything I read discussed how Rwanda operated as a feudal economy composed mostly of farmers living off the land.

I had spent more than 2 years living in Africa and, despite a rocky start, had helped build what I believed would become an important local institution in Rwanda. I loved the group of founding partners. They did the work, owned the institution, and would carry it forward. Prudence, Ginette, and Liliane were a powerful triumvirate. The future looked bright. The bakery, too, was thriving. My work was done. I shared my thoughts with my friend Dan; we were completing a study of microcredit and what it meant for a family’s ability to buy food. Dan was becoming known for his work on “household food security.” He’d recently been in Malawi, a country that had exported maize while the poorest among its population, including refugees from nearby Mozambique, nearly starved. Dan wanted to know what we could do to ensure that families could take care of themselves. We had long talks about the complexity of food aid and about how the United States and Europe protected their farmers so that during times of crisis, the only food distributed was food grown with tremendous subsidies in the United States and Europe.


pages: 515 words: 126,820

Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World by Don Tapscott, Alex Tapscott

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Airbnb, altcoin, asset-backed security, autonomous vehicles, barriers to entry, bitcoin, blockchain, Bretton Woods, business process, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, cloud computing, cognitive dissonance, corporate governance, corporate social responsibility, Credit Default Swap, crowdsourcing, cryptocurrency, disintermediation, distributed ledger, Donald Trump, double entry bookkeeping, Edward Snowden, Elon Musk, Erik Brynjolfsson, ethereum blockchain, failed state, fiat currency, financial innovation, Firefox, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, Galaxy Zoo, George Gilder, glass ceiling, Google bus, Hernando de Soto, income inequality, informal economy, interest rate swap, Internet of things, Jeff Bezos, jimmy wales, Kickstarter, knowledge worker, Kodak vs Instagram, Lean Startup, litecoin, Lyft, M-Pesa, Mark Zuckerberg, Marshall McLuhan, means of production, microcredit, mobile money, Network effects, new economy, Oculus Rift, pattern recognition, peer-to-peer lending, performance metric, Peter Thiel, planetary scale, Ponzi scheme, prediction markets, price mechanism, Productivity paradox, quantitative easing, ransomware, Ray Kurzweil, renewable energy credits, rent-seeking, ride hailing / ride sharing, Ronald Coase, Ronald Reagan, Satoshi Nakamoto, Second Machine Age, seigniorage, self-driving car, sharing economy, Silicon Valley, Skype, smart contracts, smart grid, social graph, social software, Stephen Hawking, Steve Jobs, Steve Wozniak, Stewart Brand, supply-chain management, TaskRabbit, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, The Wisdom of Crowds, transaction costs, Turing complete, Turing test, Uber and Lyft, unbanked and underbanked, underbanked, unorthodox policies, X Prize, Y2K, Zipcar

The woefully underdeveloped banking industry in Nicaragua keeps most people in an inescapable cycle of poverty and exacerbates the plight of would-be entrepreneurs. They struggle to start new businesses, register titles to their land and other assets, and resolve outstanding claims from the Sandinista government’s mass land expropriation in the 1980s.3 Stellar’s platform would enable Nicaraguans to transfer, save, invest, borrow, and lend money. Kim was both impressed and surprised by the local focus on microcredit. She understood that access to credit was paramount to economic inclusion but believed that savings, the ability to store value reliably and securely, was a prerequisite for almost all other financial services. When Kim asked about savings, she was told, “Oh, savings is not a problem around here. People have pigs.”4 Livestock makes up the vast majority of farmers’ net worth in many agrarian economies because financial services are not widely available and individuals have a tenuous right to their land.

However, new technology could remove that step. He said, “A lot of African countries leapfrogged the infrastructure of landline telecoms with cellular. They skipped that step. Blockchain will have the greatest impact in areas where the payment networks don’t exist or are very poor.”20 Blockchain will push many nascent initiatives, such as mobile-money service providers like M-Pesa in Kenya, owned by Safaricom, and microcredit outfits globally, into high gear by making them open, global, and lightning fast. A bank is the most common financial institution, and so we will use it as an example here. How do you open a bank account? If you live in the developing world today, you will likely have to visit the branch in person. In Nicaragua, there are only 7 bank branches per 100,000 people compared with 34 per 100,000 in the United States.


pages: 202 words: 62,199

Essentialism: The Disciplined Pursuit of Less by Greg McKeown

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Albert Einstein, Clayton Christensen, Daniel Kahneman / Amos Tversky, deliberate practice, double helix, en.wikipedia.org, endowment effect, Isaac Newton, iterative process, Jeff Bezos, Lao Tzu, loss aversion, Mahatma Gandhi, microcredit, minimum viable product, North Sea oil, Peter Thiel, Ralph Waldo Emerson, Richard Thaler, Rosa Parks, side project, Silicon Valley, Silicon Valley startup, sovereign wealth fund, Steve Jobs

Geoff was a textbook overachiever who had a deep desire to make a difference (to give some context for this, his grandfather was an early administrator in the Peace Corps). Geoff was fiercely ambitious, driven, and committed to making a contribution to the world: he was on the board of Kiva, he had been named Ernst and Young’s Entrepreneur of the Year and a Young Global Leader by the World Economic Forum, he was the co-founder of a successful impact investment fund, and he was the CEO of a global microcredit organization that was reaching more than 12 million poor families around the world. He was thirty-six years old and on top of his game. Geoff traveled constantly, which often made sleep difficult. His company was based in Seattle but had offices in San Francisco, India, and Kenya. He would routinely fly to London for meetings, then to India for six days to be in five different cities, to Geneva for hours of meetings with investors, and then back to Seattle for a day and a half.


pages: 237 words: 72,716

The Inequality Puzzle: European and US Leaders Discuss Rising Income Inequality by Roland Berger, David Grusky, Tobias Raffel, Geoffrey Samuels, Chris Wimer

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Branko Milanovic, Celtic Tiger, collective bargaining, corporate governance, corporate social responsibility, double entry bookkeeping, equal pay for equal work, fear of failure, financial innovation, full employment, Gini coefficient, hiring and firing, illegal immigration, income inequality, invisible hand, labour market flexibility, labour mobility, Long Term Capital Management, microcredit, offshore financial centre, principal–agent problem, profit maximization, rent-seeking, shareholder value, Silicon Valley, Silicon Valley startup, time value of money, very high income

Should they focus on equalizing opportunities to succeed rather than equalizing outcomes themselves? I don’t think that reducing poverty is a means in itself, and the results tend to be very variable. As I said before, I am convinced that efforts to ensure the fair distribution of opportunities are more beneficial to society in the long run. Charity can demean and stigmatize the poor. Social businesses, like our joint venture with Grameen, and similar microcredit schemes on the other hand empower people and allow them to play an active role in business life. We want to shift the emphasis from institutional help to selfhelp. Governments are trusted when people perceive them to be working to establish a better life for all their citizens. Equalizing opportunities play an important role here, but populist wealth distribution schemes are another matter completely!


pages: 323 words: 89,795

Food and Fuel: Solutions for the Future by Andrew Heintzman, Evan Solomon, Eric Schlosser

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agricultural Revolution, Berlin Wall, big-box store, clean water, Community Supported Agriculture, corporate social responsibility, David Brooks, deindustrialization, distributed generation, energy security, Exxon Valdez, flex fuel, full employment, half of the world's population has never made a phone call, hydrogen economy, land reform, microcredit, Negawatt, oil shale / tar sands, oil shock, peak oil, RAND corporation, risk tolerance, Silicon Valley, statistical model, Upton Sinclair, uranium enrichment

The larger hydrogen fuel cells have the additional advantage of producing pure drinking water as a by-product, a not-insignificant consideration in village communities around the world where access to clean water is often a critical concern. Distributed-generation associations need to be established throughout the developing world. Civil-society organizations, co-operatives (where they exist), micro-credit lending institutions, and local governments ought to view distributed-generation energy webs as the core strategy for building sustainable, self-sufficient communities. Breaking the cycle of dependency and despair, becoming truly “empowered,” starts with access to and control over energy. National governments and world lending institutions need to be lobbied or pressured to help provide both financial and logistical support for the creation of a hydrogen energy infrastructure.


pages: 289 words: 99,936

Digital Dead End: Fighting for Social Justice in the Information Age by Virginia Eubanks

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affirmative action, Berlin Wall, call centre, cognitive dissonance, desegregation, Fall of the Berlin Wall, future of work, game design, global village, index card, informal economy, invisible hand, Kevin Kelly, knowledge economy, labor-force participation, labour market flexibility, low-wage service sector, microcredit, new economy, post-industrial society, race to the bottom, rent control, Silicon Valley, South of Market, San Francisco, telemarketer, Thomas L Friedman, trickle-down economics, union organizing, urban planning, web application, white flight, women in the workforce, working poor

Alan Irwin and Brian Wynne, 19–46. Cambridge: Cambridge University Press. Young, Iris Marion. 1990. Justice and the Politics of Difference. Princeton, NJ: Princeton University Press. Young, Iris Marion. 1997. Difference as a Resource for Democratic Communication. In Deliberative Democracy: Essays on Reason and Politics, ed. James Bohman and William Rehg, 383–406. Cambridge, MA: MIT Press. Yunus, M. 2001. Microcredit and IT for the Poor. New Perspectives Quarterly 18 (1): 25–26. Zimmerman, Andrew D. 1995. Toward a More Democratic Ethic of Technological Governance. Science, Technology & Human Values 20:86–107. Zuboff, Shoshana. 1989. In the Age of the Smart Machine: The Future of Work and Power. New York: Basic Books. Index Academia, 33 Addams, Jane, 105 Advanced Micro Devices (AMD), 158–159 African Americans earnings, 70 education, 57–58, 67 poverty, 61 unemployment, 58, 69 Aid to Families with Dependent Children (AFDC), 85–86, 97 Allen, Dorothy, 42, 45, 91, 97, 134, 136 American Graduation Initiative, 153 ARISE (A Regional Initiative Supporting Empowerment), 168 Autonomous Technology, 83 Banta, Martha, 74 Barney, Darrin, 36 Basel hazardous waste ban, 169 Beat the System: Surviving Welfare, 119–125, 215 Benner, Chris, 61 Bernhardt, Annette, 162–163 Borda, Orlando Fals, 106 Bush (George W.) administration, 36 Call centers, 72–73 Campbell, Nancy D., 13, 145, 149–150 Campus architecture, 83–84 Capital Region, 158–159 Caregiving, 65, 75–77, 160–163 Caseworkers, 94–95 Child care, 160–162 Citizenship conceptions of, 30 as contract, 25 and IT, 29–31, 89 and political learning, 85–86 and popular technology, 96–98, 104, 125–127, 131–132, 136 Clinton, Bill, 35 Code: And Other Laws of Cyberspace, 84 Cognitive justice, 147–148, 151–152, 163 Collar Laundry Union, 50 Collective process, 18–19 Collingwood, Harris, 53–55 Colorful cards, 133 Community Asset Bank (CAB), 120, 215 Community benefits agreements (CBAs), 167 Community building, 144–146 Community Technology Center Program, 166 Community technology centers (CTCs), 165–166 Community Technology Laboratory, 109–114, 215 260 Index Composite stories, 120, 123, 125 Confidentiality, 92–93 Consensus conferences, 163–164 DuBois, W.


pages: 313 words: 84,312

We-Think: Mass Innovation, Not Mass Production by Charles Leadbeater

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1960s counterculture, Andrew Keen, barriers to entry, bioinformatics, c2.com, call centre, citizen journalism, clean water, cloud computing, complexity theory, congestion charging, death of newspapers, Debian, digital Maoism, double helix, Edward Lloyd's coffeehouse, frictionless, frictionless market, future of work, game design, Google Earth, Google X / Alphabet X, Hacker Ethic, Hernando de Soto, hive mind, Howard Rheingold, interchangeable parts, Isaac Newton, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Jean Tirole, jimmy wales, John von Neumann, Kevin Kelly, knowledge economy, knowledge worker, lone genius, M-Pesa, Mark Zuckerberg, Marshall McLuhan, Menlo Park, microcredit, new economy, Nicholas Carr, online collectivism, planetary scale, post scarcity, Richard Stallman, Silicon Valley, slashdot, social web, software patent, Steven Levy, Stewart Brand, supply-chain management, The Death and Life of Great American Cities, the market place, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Whole Earth Catalog, Zipcar

They drink clean water from one of the more than 1,737 hand-operated water pumps that have been installed since 1979 and are maintained by 1,200 mechanics, and which provide water for more than 325,000 people. In Roy’s world, demand can generate its own supply: people who need light can become lighting engineers; learners can become teachers. The most famous example of barefoot thinking in action is Bangladesh’s Grameen Bank, founded in 1976 by Muhammad Yunus, an economics professor, to provide very poor people with micro-credit. Traditional banks, reliant on professional expertise, regarded poor people seeking loans as unprofitable. Grameen employs a small body of professionals who train an army of barefoot bankers who then work with village committees to administer Grameen’s tiny loans. By 2003, Grameen had lent more than $4 billion to about 2.8 million Bangladeshis, including in 570,000 mortgages to build tin-roofs for huts to keep people dry during the monsoons.


pages: 356 words: 103,944

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik

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affirmative action, Asian financial crisis, bank run, banking crisis, bilateral investment treaty, borderless world, Bretton Woods, British Empire, capital controls, Carmen Reinhart, central bank independence, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, eurozone crisis, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, joint-stock company, Kenneth Rogoff, labour market flexibility, labour mobility, land reform, Long Term Capital Management, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, price stability, profit maximization, race to the bottom, regulatory arbitrage, savings glut, Silicon Valley, special drawing rights, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey

But the reasoning took a similar form: “Poor countries are poor primarily because they lack X: give them X and we will have solved the problem of world poverty.” For the Peruvian economist and activist Hernando de Soto, X was formal titles to property. Give poor people a piece of paper which gives them legal ownership rights over their house or their land, he thought, and you will turn them into entrepreneurs and successful capitalists.27 For the Bangladeshi economist and banker Muhammad Yunus, X was credit. Give each entrepreneur a small loan (a “microcredit”), he argued, and you will unleash a process of growth and development from below.28 Both of these ideas inspired active movements and found large numbers of practitioners worldwide. Despite their obvious differences, what all of these strategies presume is that all developing countries suffer from the same ailments and require broadly similar treatment, and that we know enough about the nature of the remedies to mount a bold, ambitious, and often costly effort to eradicate world poverty.


pages: 310 words: 91,151

Leaving Microsoft to Change the World: An Entrepreneur's Odyssey to Educate the World's Children by John Wood

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airport security, British Empire, call centre, clean water, corporate social responsibility, Deng Xiaoping, Donald Trump, fear of failure, glass ceiling, high net worth, income per capita, Jeff Bezos, Johann Wolfgang von Goethe, microcredit, Own Your Own Home, random walk, rolodex, shareholder value, Silicon Valley, Skype, Steve Ballmer

ONE OF THE FIRST “NODES” IN THE NETWORK I SET OUT TO BUILD WAS A Chicago-based entrepreneur named Michael Lindenmayer. He had attended one of our first slide shows. Afterward during the social hour he pulled me aside to compliment our work and to say that he had a myriad of ideas for how he could help us to reach our audacious goals. He had been involved early on in Grameen Bank, and what he said was music to my ears. “A decade ago, few people had heard of, or understood, micro-credit. But today millions of people knew how much good it could do to lend small amounts of money to help people start businesses, and how income from those micro-enterprises could help to lift people out of poverty. Most importantly, the model recognized that the poor are capable of helping themselves and could earn their way into self-sufficiency instead of relying on the traditional model of aid.”


pages: 305 words: 89,103

Scarcity: The True Cost of Not Having Enough by Sendhil Mullainathan

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American Society of Civil Engineers: Report Card, Andrei Shleifer, Cass Sunstein, clean water, computer vision, delayed gratification, double entry bookkeeping, Exxon Valdez, fault tolerance, happiness index / gross national happiness, impulse control, indoor plumbing, inventory management, knowledge worker, late fees, linear programming, mental accounting, microcredit, p-value, payday loans, purchasing power parity, randomized controlled trial, Report Card for America’s Infrastructure, Richard Thaler, Saturday Night Live, Walter Mischel, Yogi Berra

Low-income training programs in the United States: A nice collection of papers on training programs in the United States illustrates these challenges: Burt S. Barnow and Christopher T. King, eds., Improving the Odds: Increasing the Effectiveness of Publicly Funded Training (Washington, D.C.: Urban Institute Press, 2000). loans are used to pay off other debts: Two recent impact evaluations of microfinance illustrate the potential problems quantitatively: Dean Karlan and Jonathan Zinman, “Microcredit in Theory and Practice: Using Randomized Credit Scoring for Impact Evaluation,” Science 332, no. 6035 (2011): 1278–84; Abhijit Banerjee et al., “The Miracle of Microfinance? Evidence from a Randomized Evaluation” (MIT working paper, 2010). do not undo hard work: Some of this argument can be made without resort to the psychology of scarcity. Much of policy design makes the presumption of rationality.


pages: 265 words: 15,515

Nomad Citizenship: Free-Market Communism and the Slow-Motion General Strike by Eugene W. Holland

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capital controls, cognitive dissonance, Colonization of Mars, complexity theory, deskilling, Firefox, Frederick Winslow Taylor, full employment, informal economy, invisible hand, Jane Jacobs, means of production, microcredit, money: store of value / unit of account / medium of exchange, Naomi Klein, New Urbanism, peak oil, price mechanism, Richard Stallman, Ronald Coase, slashdot, The Death and Life of Great American Cities, The Wisdom of Crowds, transaction costs, Upton Sinclair, urban renewal, wage slave, working poor

., the Federal Reserve system) and the pri­ vate banking oligopoly, nomad finance relies on smaller-scale institutions such as credit unions and microfinance. Credit unions pool savings from a specific group of members, most often organized according to locality or occupation, and make loans available to other members at prevailing interest rates. (What rates would prevail without the standard prime rate set by the Federal Reserve, nomad financial markets themselves would decide.) Microfinance or microcredit makes very small loans available to very poor people to jump-start small business enterprises that are routinely ignored by the major banking systems. In both cases, the kind of minor, local knowledge advocated by von Hayek for free markets in general en­ ables financial institutions to make decisions about whether and where investments should be made. Equally as important as where decisions get made is how—that is, ac­ cording to what kinds of criteria.


Nation-Building: Beyond Afghanistan and Iraq by Francis Fukuyama

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Berlin Wall, business climate, colonial rule, conceptual framework, en.wikipedia.org, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, informal economy, land reform, microcredit, open economy, unemployed young men

Revenues extracted from business activities are required not only for • 126 • Rebuilding Afghanistan • government programs and services but also to eventually lessen dependence on external sources of economic assistance. A stimulated economy provides the income necessary for the disarmament, demobilization, and reintegration of private militias across the country, whose continued presence retards the establishment of national authority and threatens reconstruction programs. A revived agricultural sector calls for improvements in the country’s physical infrastructure and for the availability of inputs and microcredit; its success is critical to overcoming the illicit economy from opium-poppy growing that challenges state authority and is corrosive to Afghan society. Importantly, a reviving economy fosters the popularity of the Kabul government, ultimately also enhancing its legitimacy. The third requisite for creating a stable, modern Afghan state and economy is generous, sustained foreign assistance. Only with this aid can basic humanitarian needs be addressed, development goals advanced, and security enhanced.


pages: 325 words: 90,659

Narconomics: How to Run a Drug Cartel by Tom Wainwright

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Airbnb, barriers to entry, bitcoin, business process, call centre, collateralized debt obligation, corporate social responsibility, Credit Default Swap, credit default swaps / collateralized debt obligations, failed state, financial innovation, illegal immigration, Mark Zuckerberg, microcredit, price mechanism, RAND corporation, Ronald Reagan, Skype

And if Mexican banks were less stingy with their credit (they lend half as much as their counterparts in Brazil, and one-third as much as those in Chile),13 households and businesses would be less likely to borrow money from the mob. When analysts talk about drug cartels taking over territory where there is a vacuum of power, they envisage territory where the government has neglected to send enough police or soldiers. More often than not, there is another problem: these are places where the government has not bothered to provide any public services, from recreation to rubbish collection and microcredit. In short, the more responsible the state is, the less scope there is for the mob to show off its own phony “responsible” side. How can anyone undermine the role that cartels play as a guarantor of illegal agreements? Unlike other services, this is one that the state cannot provide, as price-fixing and bid rigging are rightly illegal. The evidence from Sicily and New York City is that mafia involvement in these industries has weakened.


pages: 452 words: 110,488

The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead by David Callahan

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1960s counterculture, affirmative action, corporate governance, David Brooks, deindustrialization, East Village, forensic accounting, full employment, game design, greed is good, high batting average, housing crisis, illegal immigration, income inequality, job satisfaction, market fundamentalism, McMansion, microcredit, moral hazard, new economy, New Urbanism, offshore financial centre, oil shock, Plutocrats, plutocrats, postindustrial economy, profit maximization, profit motive, RAND corporation, Ray Oldenburg, rolodex, Ronald Reagan, shareholder value, Silicon Valley, Steve Jobs, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, Thorstein Veblen, War on Poverty, winner-take-all economy, World Values Survey, young professional

Smart proposals abound for how to help more people create personal wealth: birth endowments that give every child a nest egg on day one and, through the miracle of compound interest, translate into real assets by adulthood; Individual Development Accounts that leverage government money to encourage poorer Americans to save; special housing programs that offer low-interest loans to first-time homeowners; micro-credit loans that allow more people to start a small business. The ideas are all there. What is needed now are serious investments aimed at creating a true "stakeholder society."4 Fourth, more needs to be done to reduce key insecurities that are part of our postindustrial economy. Americans may never again have the kind of job security that was common forty years ago. The days of strong labor unions and benevolent employers who provide good benefits may never return.


pages: 291 words: 90,200

Networks of Outrage and Hope: Social Movements in the Internet Age by Manuel Castells

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access to a mobile phone, banking crisis, call centre, centre right, citizen journalism, cognitive dissonance, collective bargaining, conceptual framework, crowdsourcing, currency manipulation / currency intervention, disintermediation, en.wikipedia.org, housing crisis, income inequality, microcredit, Mohammed Bouazizi, Occupy movement, offshore financial centre, Port of Oakland, social software, statistical model, We are the 99%, web application, WikiLeaks, World Values Survey, young professional

It also elected 54 senators, second only to the Democratic Party, and played a significant role in enacting or blocking legislation and appointments, such as the appointment of the President of the Republic. The deputies and senators were representing the decisions taken by registered members over the Internet in a number of legislative measures. Trying to set an example of new politics, the movement’s MPs returned millions of euros of their salaries to a fund to amortize Italian debt, and to a fund for micro-credit to support entrepreneurial startups, gestures that were dismissed as demagogic by other political parties. The movement also claimed to have rejected funding from the government for its campaigns, relying instead on crowdfunding from multiple sympathizers. However, the success of the movement was soon tarnished by mistakes and conflicts in the management of its decision-making system. A system based on multiple layers of consultation could not be easily implemented; factionalism developed within the parliamentary group, and the ultimate decision came to be in the hands of the charismatic leader who chastised policies and adversarial personalities in his blog and expelled from the movement a number of challengers to his rule.


pages: 353 words: 91,211

The Shock of the Old: Technology and Global History Since 1900 by David Edgerton

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agricultural Revolution, anti-communist, British Empire, conceptual framework, deglobalization, dematerialisation, desegregation, deskilling, global village, Haber-Bosch Process, interchangeable parts, knowledge economy, Mahatma Gandhi, manufacturing employment, means of production, megacity, microcredit, new economy, post-industrial society, Productivity paradox, Ronald Reagan, Silicon Valley, spinning jenny, Upton Sinclair, urban planning, V2 rocket

Treadle-powered machines, not so different from those made before 1914, were, in the 1960s, ‘by far the most important modern appliance’ in a small town of the district of Huaylas in Andean Peru.23 In Mae Hong Son, northern Thailand, in April 2002, treadle-operated Singers decorated with a sticker celebrating 150 years of Singer machines were on sale alongside white goods, next to an internet café. At the other end of the world, an expensive (male) tailor working alone making men’s suits in Lecce, Italy, also used a treadle-operated Singer.24 Treadle-powered sewing machines feature regularly in discussions of micro-credit initiatives supported by international development agencies. The sewing machine had a very particular place in the thinking of Mahatma Gandhi, as exemplary of an alternative approach to production. Gandhi was a strong opponent of the machine-based industries and famously argued not for mass production, but for production by the masses. Yet, he made what he called ‘intelligent exceptions’ to this hostility to industrially-made machines.


pages: 302 words: 83,116

SuperFreakonomics by Steven D. Levitt, Stephen J. Dubner

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agricultural Revolution, airport security, Andrei Shleifer, Atul Gawande, barriers to entry, Bernie Madoff, call centre, clean water, cognitive bias, collateralized debt obligation, credit crunch, Daniel Kahneman / Amos Tversky, deliberate practice, disintermediation, endowment effect, experimental economics, food miles, indoor plumbing, John Nash: game theory, Joseph Schumpeter, loss aversion, Louis Pasteur, market design, microcredit, Milgram experiment, oil shale / tar sands, patent troll, presumed consent, price discrimination, principal–agent problem, profit motive, randomized controlled trial, Richard Feynman, Richard Feynman, Richard Thaler, South China Sea, Stephen Hawking, The Wealth of Nations by Adam Smith, too big to fail, trickle-down economics, ultimatum game, urban planning, women in the workforce, young professional

With such a multitude of problems, what should be done to improve the lives of Indian women, especially the majority who live in the countryside? The government has tried to help by banning dowries and sex-selective abortions, but these laws have largely been ignored. A number of monetary interventions have also been designed for Indian women. These include Apni Beti, Apna Dhan (“My Daughter, My Pride”), a project that pays rural women not to abort female babies; a vast micro-credit industry that makes small-business loans to women; and an array of charitable programs launched by a veritable alphabet soup of international aid agencies. The Indian government has also vowed to make smaller condoms more readily available. Unfortunately, most of these projects have proven complicated, costly, and, at best, nominally successful. A different sort of intervention, meanwhile, does seem to have helped.


pages: 586 words: 159,901

Wall Street: How It Works And for Whom by Doug Henwood

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accounting loophole / creative accounting, affirmative action, Andrei Shleifer, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, capital asset pricing model, capital controls, central bank independence, corporate governance, correlation coefficient, correlation does not imply causation, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, dematerialisation, diversification, diversified portfolio, Donald Trump, equity premium, Eugene Fama: efficient market hypothesis, experimental subject, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, George Akerlof, George Gilder, hiring and firing, Hyman Minsky, implied volatility, index arbitrage, index fund, interest rate swap, Internet Archive, invisible hand, Isaac Newton, joint-stock company, Joseph Schumpeter, kremlinology, labor-force participation, late capitalism, law of one price, liquidationism / Banker’s doctrine / the Treasury view, London Interbank Offered Rate, Louis Bachelier, market bubble, Mexican peso crisis / tequila crisis, microcredit, minimum wage unemployment, moral hazard, mortgage debt, mortgage tax deduction, oil shock, payday loans, pension reform, Plutocrats, plutocrats, price mechanism, price stability, prisoner's dilemma, profit maximization, Ralph Nader, random walk, reserve currency, Richard Thaler, risk tolerance, Robert Gordon, Robert Shiller, Robert Shiller, shareholder value, short selling, Slavoj Žižek, South Sea Bubble, The Market for Lemons, The Nature of the Firm, The Predators' Ball, The Wealth of Nations by Adam Smith, transaction costs, transcontinental railway, women in the workforce, yield curve, zero-coupon bond

Despite claims of "empowering" women, Grameen loans formalize women's informal household labor (while blocking their entry into po- WALL STREET tentially more liberating — with all the appropriate qualifications — waged work), typically without increasing their autonomy within the household (well under half have significant control over the businesses held in their names). By contrast, the Self-Employed Women's Association of India (SEWA) offers credit, but as part of a package of education and political organizing. With Grameen, male lending officers really call the shots. The appeal of microcredit schemes like Grameen — which have been adopted enthusiastically by the likes of the World Bank, Hillary Clinton, and Citibank — is that they are a low-cost, nonthreatening substitute for real self-organization, like SEWA, and for expensive public programs like education, health care, and infrastructure investment. It may be that the lesson of the World Bank's experience over the last 50 years is of near-universal applicability: it's very difficult, if not impossible, to borrow your way out of poverty.


pages: 366 words: 117,875

Arrival City by Doug Saunders

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agricultural Revolution, Ayatollah Khomeini, Berlin Wall, Branko Milanovic, call centre, credit crunch, Deng Xiaoping, desegregation, ghettoisation, Gini coefficient, guest worker program, Hernando de Soto, Honoré de Balzac, illegal immigration, immigration reform, income inequality, informal economy, Jane Jacobs, Kibera, land reform, land tenure, low skilled workers, megacity, microcredit, new economy, pensions crisis, place-making, price mechanism, rent control, Silicon Valley, special economic zone, the built environment, The Chicago School, The Death and Life of Great American Cities, upwardly mobile, urban planning, urban sprawl, white flight, working poor, working-age population

It helped that São Paulo passed a comprehensive gun-control law in 2003, which the Jardim Angela community police enforce aggressively. It helped that a farsighted mayor the same year recognized the social and economic value of giving the outlying favelas comprehensive bus and commuter-train service and an affordable transit pass for poor workers. It helped that medical clinics and street lighting were installed. It helped that micro-credit agencies established themselves here and offered loan guarantees and that small-business laws were liberalized, making it easier for favela-dwellers to use the value in their real estate to start a company. And it helped that entrepreneurs and agencies built venues to popularize and profit from the music and dance that had been an underground part of the favela’s culture. For the arrival city’s third generation, there were suddenly reasons to stick around and improve the place.


pages: 482 words: 117,962

Exceptional People: How Migration Shaped Our World and Will Define Our Future by Ian Goldin, Geoffrey Cameron, Meera Balarajan

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Admiral Zheng, agricultural Revolution, barriers to entry, Berlin Wall, Branko Milanovic, British Empire, conceptual framework, demographic transition, Deng Xiaoping, failed state, Fall of the Berlin Wall, Gini coefficient, global supply chain, guest worker program, illegal immigration, income inequality, income per capita, job automation, Joseph Schumpeter, knowledge economy, labor-force participation, labour mobility, Lao Tzu, life extension, low skilled workers, low-wage service sector, Malacca Straits, microcredit, Network effects, new economy, New Urbanism, open borders, out of africa, price mechanism, purchasing power parity, Richard Florida, Silicon Valley, Silicon Valley startup, Skype, spice trade, trade route, transaction costs, transatlantic slave trade, transatlantic slave trade, women in the workforce, working-age population

Borders enclose many people within a poverty trap.34 The extreme example is in the countries of the Sahel, where colonial borders have been drawn around countries that have little economic, ethnic, or historical cohesion. In the past, there would have been mass emigration; now citizens of these countries are trapped in poverty and a cycle of conflict. This is a global phenomenon, as Kerry Howley explains: Say you're a Bangladeshi taxi driver struggling to survive on your daily wage in Dhaka.… Microcredit loans might net you an extra $700 over the course of a lifetime. Working [in the United States], you're likely to make the same amount in a month. Nothing rich countries can send the global poor—not loans, not textbooks, not fair-wage campaign materials—will boost the income of the average worker nearly so much as letting him walk among the wealthy. Transported from Haiti or Nigeria to the United States or Canada, a low-skilled worker will watch the value of his labor jump more than 700 percent—instantly.35 When we consider that wealthy countries spend $70 billion in overseas development assistance a year, liberalizing movement offers unparalleled benefits to the world's poor.


pages: 503 words: 131,064

Liars and Outliers: How Security Holds Society Together by Bruce Schneier

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airport security, barriers to entry, Berlin Wall, Bernie Madoff, Bernie Sanders, Brian Krebs, Broken windows theory, carried interest, Cass Sunstein, Chelsea Manning, corporate governance, crack epidemic, credit crunch, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Graeber, desegregation, don't be evil, Double Irish / Dutch Sandwich, Douglas Hofstadter, experimental economics, Fall of the Berlin Wall, financial deregulation, George Akerlof, hydraulic fracturing, impulse control, income inequality, invention of agriculture, invention of gunpowder, iterative process, Jean Tirole, John Nash: game theory, joint-stock company, Julian Assange, meta analysis, meta-analysis, microcredit, moral hazard, mutually assured destruction, Nate Silver, Network effects, Nick Leeson, offshore financial centre, patent troll, phenotype, pre–internet, principal–agent problem, prisoner's dilemma, profit maximization, profit motive, race to the bottom, Ralph Waldo Emerson, RAND corporation, rent-seeking, RFID, Richard Thaler, risk tolerance, Ronald Coase, security theater, shareholder value, slashdot, statistical model, Steven Pinker, Stuxnet, technological singularity, The Market for Lemons, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, too big to fail, traffic fines, transaction costs, ultimatum game, UNCLOS, union organizing, Vernor Vinge, WikiLeaks, World Values Survey, Y2K

In the 11th century, the Maghribi traders of the medieval Mediterranean had a reputation similar to the Quakers. A thousand years earlier, Roman letters of introduction were similarly trusted throughout the empire. Political scientist Robert Putnam has argued that mistrust increases in a community as ethnic diversity increases. Evidence of this effect comes from sources as diverse as studies of carpooling, Peruvian micro-credit cooperatives, and Civil War deserters. Even worse, this inherent mistrust of those in other ethnic groups isn't offset by an increase in trust of those in one's own ethnic group; trust across the board weakens in more ethnically diverse communities.11 So it should come as no surprise that we have an enormous number of membership markers that we use to determine who is like us: language, dress, ethnicity, gang tags, haircuts, tattoos, jewelry, T-shirt slogans, food choices, gestures, secret handshakes, turns of phrase in speech, formal membership credentials, and so on.


pages: 487 words: 139,297

Dancing in the Glory of Monsters: The Collapse of the Congo and the Great War of Africa by Jason Stearns

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Berlin Wall, business climate, clean water, colonial rule, failed state, Fall of the Berlin Wall, land tenure, Mahatma Gandhi, means of production, microcredit, technology bubble, transfer pricing, unemployed young men, working-age population, éminence grise

When fighting broke out in Kigali in April 1994, she fled with her ailing mother and members of her family, and after several weeks of walking, she crossed the border into Zaire and made herself at home in Inera, a camp on the shores of Lake Kivu. There a slum of 55,000 refugees living in squalid huts had sprung up overnight on the muddy silt. Beatrice drew on her professional experience, quickly becoming a leader in a network of nonprofit groups working in the camps. She organized a small microcredit program to allow refugees to make a living in the camps, and she helped publish two newsletters for refugee women to express themselves and explain their problems. Although Beatrice had a small salary, she lived in one of the blindés, the tiny, doghouse-size tents where the refugees lived. Each family was given one tarpaulin, four meters by five, with the insignia of the UN refugee agency: a laurel wreath protecting a family inside.


pages: 446 words: 138,827

What Should I Do With My Life? by Po Bronson

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back-to-the-land, Berlin Wall, clean water, double entry bookkeeping, Exxon Valdez, financial independence, high net worth, job satisfaction, Menlo Park, microcredit, new economy, Silicon Valley, South of Market, San Francisco, special economic zone, telemarketer, traffic fines, young professional

The rest of the time she’s out there somewhere, beyond reach, doing her work, helping the people she considers her real family. This would be such a happier story if I could say that Ana found her in-between in Time Dollars, and now her life is happy and she’s reunited with her family, and she makes a decent, modest living, and she even has a new boyfriend. Plenty of people who do the kind of work that Ana does have that sort of picturesque life. (My older brother, for example—a former bank lending officer, he runs microcredit programs in several countries for Project Hope, a large nonprofit, and lives in the suburbs of Northern Virginia with his family.) But I came to Miami and I found Ana, and I can’t hide what I saw. I’m aware that when I mention she’s getting by on less than twenty-five grand a year, I kill any chance that someone else will choose to follow the path she’s blazed. Ana’s story becomes the story of a saint—maybe a curmudgeonly saint, or a flawed saint—but a saint nonetheless, because who but a saint would find her security in getting by on less and less every year?


pages: 511 words: 148,310

Winning the War on War: The Decline of Armed Conflict Worldwide by Joshua S. Goldstein

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Albert Einstein, Ayatollah Khomeini, Bartolomé de las Casas, Berlin Wall, Black Swan, colonial rule, cuban missile crisis, Doomsday Clock, failed state, immigration reform, income inequality, invention of writing, invisible hand, land reform, microcredit, Mikhail Gorbachev, purchasing power parity, RAND corporation, Steven Pinker, Tobin tax, unemployed young men, Winter of Discontent, Y2K

In the Niger Delta region in the south of Nigeria, where a low-level violent conflict has run for decades—poor local communities want more money and less environmental damage from the massive oil drilling there—women in 2002 took a new tack. They staged a nonviolent sit-in against Chevron/Texaco to push for the same demands that men had been seeking with guns. Chevron/Texaco opened a dialogue with the women and agreed to adopt a “different philosophy,” in the words of one company executive, to “do more with communities” by funding schools, clinics, water, and electricity, and giving microcredit to women. The conflict in this region diminished in 2009, with a government amnesty and a reduction in rebel attacks, although the final outcome is not yet clear. No doubt the women’s nonviolent actions contributed to the progress that the Niger Delta has made. Women also played a vital role in South Africa’s peaceful transition from apartheid to democracy in the early 1990s. One in four peace monitors sent out under the National Peace Accord was a woman—included in each monitoring group because they were found to “bring the temperature down.”


pages: 386 words: 122,595

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated) by Charles Wheelan

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affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, capital controls, Cass Sunstein, central bank independence, clean water, collapse of Lehman Brothers, congestion charging, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, Daniel Kahneman / Amos Tversky, David Brooks, demographic transition, diversified portfolio, Doha Development Round, Exxon Valdez, financial innovation, floating exchange rates, George Akerlof, Gini coefficient, Gordon Gekko, greed is good, happiness index / gross national happiness, Hernando de Soto, income inequality, index fund, interest rate swap, invisible hand, job automation, Joseph Schumpeter, Kenneth Rogoff, libertarian paternalism, low skilled workers, lump of labour, Malacca Straits, market bubble, microcredit, money: store of value / unit of account / medium of exchange, Network effects, new economy, open economy, presumed consent, price discrimination, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, race to the bottom, RAND corporation, random walk, rent control, Richard Thaler, rising living standards, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, transcontinental railway, trickle-down economics, urban sprawl, Washington Consensus, Yogi Berra, young professional

The bottom line never changes: Individuals, firms, and governments need capital to do things today that they could not otherwise afford; the financial markets provide it to them—at a price. Modern economies cannot survive without credit. Indeed, the international development community has begun to realize that making credit available to entrepreneurs in the developing world, even loans as small as $50 or $100, can be a powerful tool for fighting poverty. Opportunity International is one such “microcredit” lender. In 2000, the organization made nearly 325,000 low-collateral or non-collateral loans in twenty-four developing countries. The average loan size was a seemingly paltry $195. Esther Gelabuzi, a widow in Uganda with six children, represents a typical story. She is a professional midwife, and she used a tiny loan by Western standards to set up a clinic (still without electricity). She has since delivered some fourteen hundred babies, charging patients from $6 to $14 each.


pages: 496 words: 154,363

I'm Feeling Lucky: The Confessions of Google Employee Number 59 by Douglas Edwards

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Albert Einstein, AltaVista, Any sufficiently advanced technology is indistinguishable from magic, barriers to entry, book scanning, Build a better mousetrap, Burning Man, business intelligence, call centre, crowdsourcing, don't be evil, Elon Musk, fault tolerance, Googley, gravity well, invisible hand, Jeff Bezos, job-hopping, Menlo Park, microcredit, music of the spheres, Network effects, P = NP, PageRank, performance metric, pets.com, Ralph Nader, risk tolerance, second-price auction, side project, Silicon Valley, Silicon Valley startup, slashdot, stem cell, Superbowl ad, Y2K

We wouldn't mislead people like our partner Yahoo, which at the time was experimenting with a pay-for-inclusion program that sold placement in their results. Google wouldn't treat employees badly or sell products that worked poorly. We wouldn't waste people's time—a point Larry emphasized again and again. We need to do good, he said. We need to do things that matter on a large scale. Things that are highly leveraged. When I asked for examples, he mentioned micro-credits in Bangladesh and the Rocky Mountain Institute and talked about changing business systems to make them environmentally friendly while saving money. He also talked about distributed computing, drug discovery, and making the Internet faster. And that wasn't all. We should be known for making stuff that people can use, he said, not just for providing information. Information is too restrictive.


pages: 414 words: 119,116

The Health Gap: The Challenge of an Unequal World by Michael Marmot

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active transport: walking or cycling, Affordable Care Act / Obamacare, Atul Gawande, Bonfire of the Vanities, Broken windows theory, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, centre right, clean water, congestion charging, correlation does not imply causation, Doha Development Round, epigenetics, financial independence, future of work, Gini coefficient, Growth in a Time of Debt, illegal immigration, income inequality, Indoor air pollution, Kenneth Rogoff, Kibera, labour market flexibility, lump of labour, Mahatma Gandhi, meta analysis, meta-analysis, microcredit, New Urbanism, obamacare, paradox of thrift, race to the bottom, Rana Plaza, RAND corporation, road to serfdom, Simon Kuznets, Socratic dialogue, structural adjustment programs, the built environment, The Spirit Level, trickle-down economics, urban planning, Washington Consensus, Winter of Discontent, working poor

Instead of toiling beneath the surface of human dignity, dealing with the waste we would all rather not acknowledge, they were working to enhance others’ dignity and their own, by working to help women look more beautiful. Pictures of these graceful former scavengers in white saris gladden the heart. Other scavenger women have also been trained to make pickles, have various jobs in food processing, do office jobs, and have received micro-credits for small businesses. Lalta saw her pay go from 600 rupees a month to 2,000 rupees. More, she says: ‘From a heap of humiliation to the heights of self-respect and self-confidence, I believe life has turned out miraculously for the good. I don’t ask for more, for today I can stand and face the world with respect.’ When I hear people in rich countries lament appalling working or living conditions with no apparent way out, I remind them of Lalta and people like her in demeaning work all over the world, and the power of group action and vision to transform people’s lives.


The Prince of the Marshes: And Other Occupational Hazards of a Year in Iraq by Rory Stewart

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Ayatollah Khomeini, British Empire, clean water, Etonian, full employment, Khartoum Gordon, Masdar, microcredit, trade route, unemployed young men, urban planning

Marines who were running the Iraqi Army recruitment, convinced them to provide a thousand places for soldiers from Maysan, and invited them down to site one of their recruitment centers in the province. She found that hundreds of millions were available for the Marsh Arabs and that foreign experts were discussing reflooding the marshes, but that few Marsh Arabs had been included in the discussions. So she formed a Marsh Arab council to represent their interests, and she pressed to create a micro-credit scheme for small businesses. We worked fourteen- to sixteen-hour days and were seldom able to take a day off. I no longer had time for a run with the soldiers every evening. I was concerned that we would become stale if we kept up this pace for the next seven and a half months. And although our operations were becoming more orderly, we were still not entirely in control. The bodyguard team often seemed to be on weapons training when Molly wanted to go somewhere; Baghdad refused to acknowledge or respond to our increasingly detailed requests for information; Basra still delayed contracts for weeks.


pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna

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1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, complexity theory, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, labour market flexibility, labour mobility, LNG terminal, low cost carrier, manufacturing employment, mass affluent, megacity, Mercator projection, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Peace of Westphalia, peak oil, Peter Thiel, Plutocrats, plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day

Over 250,000 Burmese live in Thailand alone, without which the micro-economy would grind to a halt just as many American cities and towns would without Mexicans. As in Europe, a generation of post-national Southeast Asians is being born. FROM “SCRAMBLE FOR AFRICA” TO PAX AFRICANA Unscrambling Africa Everyone seems to have a one-word answer to the plight of African nations today: “democracy,” “secession,” “micro-credit,” “literacy,” “vaccines.” But African states won’t survive at all without basic physical infrastructure. What will make the difference between celebrating independence and achieving success in Africa is not just political nation building but physical state building—both within and across borders. Africa has never had a time-out period to pause and decide how to best organize itself without outside interference.


pages: 624 words: 180,416

For the Win by Cory Doctorow

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barriers to entry, Burning Man, double helix, Internet Archive, inventory management, loose coupling, Maui Hawaii, microcredit, New Journalism, Ponzi scheme, Post-materialism, post-materialism, random walk, RFID, Silicon Valley, skunkworks, slashdot, speech recognition, stem cell, Steve Jobs, Steve Wozniak, supply-chain management, technoutopianism, union organizing, urban renewal, wage slave

This plant is a living lab: this is the kind of market intelligence you can’t buy, right here. We should set up more of these. Invite squatters all over the country to move onto our grounds, test out our products, help us design, build and market them. We can recruit traveling salespeople to go door to door in the shanties and take orders. Shit, man, you talk about the Grameen Bank all the time—why not go into business providing these people with easy microcredit without preying on them the way the banks do? Then we could loan them money to buy things that we sell them that they use to better their lives and earn more money so they can pay us back and buy more things and borrow more money—” Kettlewell held up a hand. “I like the theory. It’s a nice story. But I have to sell this to my Board, and they want more than stories: where can I get the research to back this up?”


pages: 725 words: 221,514

Debt: The First 5,000 Years by David Graeber

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Admiral Zheng, anti-communist, back-to-the-land, banks create money, Bretton Woods, British Empire, carried interest, cashless society, central bank independence, colonial rule, corporate governance, David Graeber, delayed gratification, dematerialisation, double entry bookkeeping, financial innovation, full employment, George Gilder, informal economy, invention of writing, invisible hand, Isaac Newton, joint-stock company, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, oil shock, payday loans, place-making, Ponzi scheme, price stability, profit motive, reserve currency, Ronald Reagan, seigniorage, short selling, Silicon Valley, South Sea Bubble, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transatlantic slave trade, transatlantic slave trade, tulip mania, upwardly mobile, urban decay, working poor

The chief cause of bankruptcy in America is catastrophic illness; most borrowing is simply a matter of survival (if one does not have a car, one cannot work); and increasingly, simply being able to go to college now almost necessarily means debt peonage for at least half one’s subsequent working life.32 Still, it is useful to point out that for real human beings survival is rarely enough. Nor should it be. By the 1990s, the same tensions had begun to reappear on a global scale, as the older penchant for loaning money for grandiose, state-directed projects like the Aswan Dam gave way to an emphasis on microcredit. Inspired by the success of the Grameen Bank in Bangladesh, the new model was to identify budding entrepreneurs in poor communities and provide them with small low-interest loans. “Credit,” the Grameen Bank insisted, “is a human right.” At the same time the idea was to draw on the “social capital”—the knowledge, networks, connections, and ingenuity that the poor people of the world are already using to get by in difficult circumstances—and convert it into a way of generating even more (expansive) capital, able to grow at 5 to 20 percent annually.


pages: 603 words: 182,781

Aerotropolis by John D. Kasarda, Greg Lindsay

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3D printing, air freight, airline deregulation, airport security, Akira Okazaki, Asian financial crisis, back-to-the-land, barriers to entry, Berlin Wall, big-box store, blood diamonds, borderless world, British Empire, call centre, carbon footprint, Clayton Christensen, cleantech, cognitive dissonance, conceptual framework, credit crunch, David Brooks, David Ricardo: comparative advantage, Deng Xiaoping, deskilling, edge city, Edward Glaeser, failed state, food miles, Ford paid five dollars a day, Frank Gehry, fudge factor, full employment, future of work, Geoffrey West, Santa Fe Institute, George Gilder, global supply chain, global village, gravity well, Haber-Bosch Process, Hernando de Soto, hive mind, if you build it, they will come, illegal immigration, inflight wifi, interchangeable parts, intermodal, invention of the telephone, inventory management, invisible hand, Jane Jacobs, Jeff Bezos, Kangaroo Route, knowledge worker, kremlinology, labour mobility, Marshall McLuhan, Masdar, McMansion, megacity, Menlo Park, microcredit, Network effects, New Economic Geography, new economy, New Urbanism, oil shale / tar sands, oil shock, peak oil, Peter Thiel, pets.com, pink-collar, pre–internet, RFID, Richard Florida, Ronald Coase, Ronald Reagan, savings glut, Seaside, Florida, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Skype, smart cities, smart grid, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, spinning jenny, stem cell, Steve Jobs, supply-chain management, sustainable-tourism, telepresence, the built environment, The Chicago School, The Death and Life of Great American Cities, The Nature of the Firm, thinkpad, Thomas L Friedman, Thomas Malthus, Tony Hsieh, trade route, transcontinental railway, transit-oriented development, traveling salesman, trickle-down economics, upwardly mobile, urban planning, urban renewal, urban sprawl, walkable city, white flight, Yogi Berra

Nakhon Suvarnabhumi Of course, “going back” was Thaksin Shinawatra’s first promise as prime minister. Elected by a landslide in 2001, Thaksin was one of Thailand’s richest men, having leveraged his family’s modest fortune into a TV and telecom empire. He ran as a self-made populist, ignoring Bangkok’s educated elites in favor of winning the hearts and minds of poor farmers in the countryside. He promised them a New Deal of universal health care, public works, microcredit, and outright cash handouts to the villages—in effect buying their votes. He announced his aim in early speeches to move away from the “East Asian economic model” that was “overly dependent upon exports produced by foreign technology brought in by foreign investors with low value-added content and relying mainly on cheap labor.” Pulling the needle would prove impossible, though. After a minor panic ensued among foreign investors, Thaksin recanted and elaborated that he was actually pursuing a “dual-track” strategy: self-reliance on the one hand, and increased exports, foreign investment, and tourism on the other.