Save the World, Win a Prize

If I had to have a cause, this would be it.

Muhammad Yunus, who as you all probably don’t know/care (I’m assuming it’s Americans reading this, and therefore not really down with international news), just won the Nobel Peace Prize.

The reason he won is the due to the program he lays out in his book, Banker for the Poor: Micro-Lending and the Battle Against World Poverty. In it, he talks about micro-credit and its use as an effective means to combat true poverty.

What is micro-credit, you ask? Simply this: how much would it take the poorest of the poor to start up an entrepreneurial enterprise in order to bring themselves to a level of subsistence, if not higher. The idea is that with very small loans, loans that regular banks wouldn’t even consider due to a number of erroneous factors, people can buy raw materials or tools that will enable them to produce a service or product that they can then sell in order to earn more money. Clearly it is a little more complicated that that, but here’s the catch: It’s not that much more complicated.

Which is a great catch, if you ask me.

Yunus demonstrates how that such a program is not only feasible, but almost universally successful. Once he starts his lending program in his native Bangladesh, the Grameen Bank, he consistently proves the nay-sayers wrong time and time again. It’s almost uncanny, but this program appears to be that silver bullet that people have been looking for so long.

This is truly the most inspirational book I’ve ever read. Here’s a man, who through the grace of privilege and talent, rises to a position of prominence, and instead of just sitting back on his laurels, decides to do something to make the world better. Disregarding almost every known economic practice for eradicating poverty, he starts from scratch, starts small, and in the end, has produced something both valuable and beautiful.

And what’s great is that he paints the picture so well.

Maybe it seems like he’s the luckiest man in the world (because it is pretty amazing, at first, how successful he was at reaching the right people with the right attitudes). But then you realize that it’s not the poor who need to make these contacts. Rather, it’s the rich and powerful who have to decide that this is a viable solution, and they’re the ones who will have the right contacts anyway. Yunus is a gifted story-teller, and he brings a very dry story off in a wholly excellent way. He doesn’t belabor points, he doesn’t bog you down with anecdotes, he doesn’t bore you with statistics. What he does with those three things, though, is give you enough of each that in the end you are almost fully conversant in the problems at hand, and how to go about fixing them. He doesn’t give you all the technical information that would be irrelevant for the average reader, but he doesn’t hold back anything that would be useful in making an objective opinion.

I think one reason I enjoy the idea so much, too, is because this is sound fiscal conservatism, but with a human side. The idea here is not charity – Yunus in fact eschews charity as being a false prop. This is not welfare, either. Loans are loans – they are meant to be paid back, and they are used to stimulate personal economies. The people themselves come up with their own business plans and work to find a niche in which they can be successful enough to obtain another loan, expand, and so on. This is the Jeffersonian/Lincoln idea of conservatism, in which each man (and now, of course, woman) has a business (or land) to call their own, in which they derive their livelihood.

And, ideally, it’s without government interference.

That’s the rub: getting governments out of the “welfare” business. That is not to say that governments shouldn’t strive to gain healthcare and other benefits for their citizens. However, as Yunus points out, government programs inevitably mean bureaucracies, which in turn means either corruption, wasted resources, or both. Tax dollars end up paying the bureaucrats, and not truly fund the programs they work for. By creating private banks to issue these loans, Yunus is calling for an elimination of the middleman, and his success is proof that this will work.

The largest setback I see is how this system would work in a First World country, such as the U.S. Yunus points to successful programs hear, but he also lists the drawbacks of trying to start such a program in our country. In a poor country, a radical shift has a higher likelihood of catching on, because there is less institution to bog it down (which is not to say it’s a walk in the park, either). In the US, where the Welfare system practically promotes people not working, work needs to be done on a legislative level in order to allow for people a chance to use the loans to get off of Welfare, and not be immediately ineligible once they receive the loan.

Still, it is important to remember that these loans are designed to help the poorest of the poor, and, unfortunately, many people who consider themselves poor are actually incredibly well-off compared to these bottom-dwellers. That’s why Yunus felt the need to redefine “poor” to reflect just who he is talking about. Micro-lending can eventually help these “not-so-poor,” but our priority must be to make it possible for everyone to survive.

Perhaps my greatest problem with his program is that it will be running into a wall, soon. Micro-lending is a fantastic idea, but until governments acknowledge it as being, for now, the most effective solution, trade barriers will only limit the ability of these loans to take on their fullest potential.

I highly recommend this book to everyone. If you don’t think it works, at least hear him out. If you want to learn more about it, of course, read it. The big thing is that this is not theory, this is practice. And that’s what makes the difference compared to every other economic principle. Yunus did not win the Nobel Prize for Economics. He won it for Peace. That’s got to mean something.

Here's a link to purchase the book (I'm going to start doing this from now on, but obviously check it out of your local library if you don't want to own it. I'm putting Barnes and Noble links because that's where I shop, but again, choose wherever you want):


Banker for the Poor: http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?z=y&EAN=9781586481988&itm=1

Here's a link to Grameen's web-site:

http://www.grameen-info.org/