One economic "innovation" called Microcredit (small loans allocated to poor persons in the Third World for starting their own businesses) offered the poor an opportunity to become entrepreneurs, thus overcoming their conditions of misery and squalor. This innovation could unlock their entrepreneurial and creative impulses.
Any assistance program attempted on even a micro scale can show successes as well. Assessments of the successes of microcredit generate vigorous debate and disagreements. Some evidence shows that microcredit has some potential to empower poor persons to become economically independent.
High repayment rates of 90-95% offer a glimmer of hope for microcredit's promoters. Regardless of repayment rates, evidence exists that undermines microcredit as an effective anti-poverty measure. Moreover, assessments of microcredit's success are filled with computational challenges especially given the number of nations receiving such loans and the amount of data needed to be reviewed. Nonetheless, some troublesome trends are identified that suggest other measures should be emphasized more in order to combat poverty.
Microcredit's failures are easily overlooked though because it finds some of its appeal from celebrity endorsements. Many celebrities can endorse microcredit, but none tug more strongly at the public conscience than the putative voice of Bono:
“Give a man a fish, [and] he’ll eat for a day. Give a woman microcredit, [and] she, her husband, her children, and her extended family will eat for a lifetime.” [1]Bono's praise should galvanize First World support for this crusade. No evidence is needed for Western culture that privileges celebrity. But, for us incorrigibly curious persons, more discussion is necessary.
The neo-liberals pushed such measures without showcasing a comprehensive body of empirical evidence justifying their zeal for such panaceas like microcredit. But, reality has exposed neo-liberal consensus not as an economic model developed from fixing deficiencies in the post-War social democratic model; rather, as a raw agenda presented as empirically valid to mask it being used to wage class warfare. Elites pose as benevolent powers expressing noble sounding phrases like "winning hearts and minds" and "soft power." They express such noble rhetoric to convince the powerless to accept tools of supposed empowerment on the elites' terms.
The first actual microcredit program was attempted in 1972 in Recife, Brazil. [2]. USAID implemented its initial microcredit experiment only 7 years after the U.S. supported a military coup in Brazil. Thereafter its revolutionaries being silenced poised Brazil to receive the Manna of microcredit, creating a nation of entrepreneurs.
Milford Bateman summarizes some of the critical effects of microloans, especially in Africa, Latin America, and even Bosnia and Bangladesh. First, microenterprises saturated the market with goods that ironically were already abundantly available. And, this result drove down prices thereby reducing incomes of the subject populations. Next, these populations realizing microloans would not reduce poverty but were repurposed into cash used to cover essential goods. The net result Bateman argues is microcredit funded small enterprises that offered products without concurrently creating sufficient demand for them. Say's Law that is based on infamous claim that supply creates its own demand was not vindicated in the Third World of microfinance. This celebrated potential elixir to poverty instead prolonged a vicious cycle of unmanageable indebtedness.
Another important factor in our comprehending the dominant powers' motivation of creating microcredit was its use as a preemptive tool to weaken revolutionary zeal:
Essentially, if at least the hope of a better future could be established, so the thinking went, the world’s poor would be more content with their current lot, and would refuse to support those seeking to change the prevailing US-centered economic and political system in a leftwards direction, still less embrace the then ‘bogey-man’ – the Soviet Union. The practical aim was to pre-empt further Cuban-style popular revolutions and similar ‘bottom-up’ challenges emanating from various political, social and church-based (‘liberation theology’) popular movements [3]This belief in directing efforts to prevent social movements from promoting salvation under a Marxist banner led to the U.S. creating the first official microcredit program in Recife, Brazil as mentioned above. The U.S. objectives for microcredit show their using it as just another tool to maintain hegemony over the subject nations.
Of course for those who eschew collective action by labor believe nothing solves social problems better than technological advances. Their mindset believes such a process if left to follow a course untouched by the corrupt, incompetent hands of the state eventually benefits all who show enough boldness to leave what venture capitalist, former Governor of Massachusetts and U.S. Presidential candidate and reluctant Mormon, Mitt Romney once described the 47% of Americans who won't take responsibilities for their lives. If the underprivileged leave their parasitic class behind to pursue the world of algorithms, will their improved standard of living terminate collective action among workers? Collective action in the U.S. is dismissed as a pejorative for some type of socialism that many conflate with Stalinism, Leninism, Maosim. These isms sound beyond antiquated but reactionary right-wingers still invoke them.
Post-humanism offers such mixed yet vivid images of utopia and dystopia that focusing on working classes is anti-climatic. Nick Bostrom, Oxford University Philosophy Professor, summarizes the Transhumanist view of humanity as work in progress:
As transhumanism progresses why focus on the transient phenomenon of humans. This movement seeks to recreate humanity, rendering moot any concerns about the effectiveness or necessity of working classes uniting to promote their well being. Why should we encourage Workers of the World to Unite when the posthumanist dream of the Singularity beckons? But, at the same time hopes of a post-human civilization are really not necessary to convince our abandoning collective action among workers.Transhumanists view human nature as a work-in-progress, a half-baked beginning that we can learn to remold in desirable ways. Current humanity need not be the endpoint of evolution. Transhumanists hope that by responsible use of science, technology, and other rational means we shall eventually manage to become posthuman, beings with vastly greater capacities than present human beings have. [4]
The deeply embedded obsession with many to avoid promoting collective actions results partly from their view that labor is completely dependent on capital. Labor is just wasted potential until put to use by capital. Neo-liberals and neo-cons (not that they aren't really the same group) see labor much differently than Abe. He believes labor is a given, a group of humans whose value precedes it being quantified and qualified by capital:
Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights. Nor is it denied that there is, and probably always will be, a relation between labor and capital producing mutual benefits. The error is in assuming that the whole labor of community exists within that relation. A few men own capital, and that few avoid labor themselves, and with their capital hire or buy another few to labor for them. A large majority belong to neither class--neither work for others nor have others working for them. [5]One cannot utter any concerns about labor's well being without being dismissed from respectable discourse for expressing the modern heresy of socialism. The neo-liberal consensus today has no patience for examining labor's relation to capital other than restating the former's complete dependence on the latter.
Working classes' efforts to promote their interests are challenged by an elite class of neo-liberals or social darwinists of whom some doubtlessly overlap with the transhumanists who believe humanity is evolving toward the Singularity. Working classes should first resist accepting their alleged, inevitable fate of progressing into post-humans. Their post-human fate is proclaimed by those who despise them in their current form as only human.
Economic reform or aid programs don't occur in a vacuum. Do the gods of finance offer microcredit as a benevolent hand to the poor? Should working classes accept that what it means to be human is undergoing possible transformations that if reached will render their plight irrelevant? If they resist their fate as perpetually marginal beings, they should consider collective action.
[1]. Milford Bateman. "The Rise and Fall of Muhammad Yunus and the Microcredit Model." International Development Studies Working Paper Series: #001 January 2014. http://www.microfinancegateway.org/sites/default/files/mfg-en-paper-the-rise-and-fall-of-muhammad-yunus-and-the-microcredit-model-jan-2014.pdf
[2]. Ibid.
[3]. Ibid.
[4]. Nick Bostrom. "Transhumanist Values." http://www.nickbostrom.com/ethics/values.html accessed March 12, 2016. essay also available at http://www.nickbostrom.com/ethics/values.pdf and Ethical Issues for the 21st Century, ed. Frederick Adams (Philosophical Documentation Center Press, 2003); reprinted in Review of Contemporary Philosophy, Vol. 4, May (2005)]
5. Abraham Lincoln. XVI President of the United States: 1861-65. "First Annual Message." December 03, 1861. The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=29502
For sources that promote the success of micorcredit:
http://www.cgap.org/blog/does-microcredit-really-help-poor-people
http://www.cgap.org/blog/95-good-collection-rate
A detailed source that features a detailed analysis of the research methods used to assess microcredit's overall effectiveness:
http://r4d.dfid.gov.uk/PDF/Outputs/SystematicReviews/Microfinance2011Duvendackreport.pdf
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