The only reason why commercial banks and other money-lenders got onto the
micro-lending scheme is that Muhammad Yunus's initial launch was unable to
be maintained at local level. Like local currency schemes, the local people
could just about generate a local recycling.but never to create a sizeable
enough profit that could be re-invested. further.
K
At 02:16 18/11/2010 -0800, Michael Gurstein wrote:
The reason(s) for the decline of microfinance in various parts of India
has more to do with sociological naivety, arrogance and greed than with
anything you seem to be pointing to in your note below, Keith.
The transformation of fairly simple (and very long standing) notions of
mutual support and collective norm enforcement into the central theme for
"status goods" driven hi tech zillionaire philanthropists (entrepreneurs
in their arrogance funding what they assumed would be entrepreneurial (and
not socially driven) enterprises in rural India and elsewhere) and then
having even this swept up into profit driven (usurial lending) IPO's is
what has caused the local problems.
M
-----Original Message-----
From: [email protected]
[mailto:[email protected]] On Behalf Of Keith Hudson
Sent: Thursday, November 18, 2010 1:53 AM
To: RE-DESIGNING WORK, INCOME DISTRIBUTION, ,EDUCATION
Subject: [Futurework] It's those frontal lobes again
Reading this morning in the New York Times that the microcredit industry
among the poor in India's largest state, Andrah Pradesh, is now collapsing
reminds us that "picking oneself up by one's bootstraps" is in the same
category as the perpetual motion machine. An impossibility. Muhammad
Yunus's initial idea of the Grameen Bank, which dazzled so many with great
hope in the 70s, 80s and 90s and for which he received a Nobel Peace Prize
in 2006, is now crumbling in India and will no doubt do so elsewhere.
Steady-state systems, never mind hoped-for economic growth, never work
unless energy, money, ideas, what-have-you, come in from the outside --
and constantly, too. This is a basic thermodynamic law (which most
economists and politicians are totally unaware of). Life on earth (truly
the 'master economy') only exists because the sun is pouring energy on it
every day. Similarly, economic systems only exist by means of continuously
accessing new energy resources or by making more efficient use of those we
already exploit. Furthermore, economic systems can only grow if there's a
chain of uniquely new status goods beckoning the mass consuming public
onwards -- to work hard and save hard -- as they did for most of the last
250 years or so.
Both of those are problem areas now. Fossil fuel energy has probably
passed its peak and there are no alternatives so far that can possibly
take up enough slack or maintain the low energy costs that we have become
used to. There are now no more iconic status goods which can motivate all
classes of Western society. No matter how much money governments print, it
will only inflate prices because there are only replacement and
embellishment markets for existing goods available now. And those, by
themselves, won't supply sufficient profit margins and re-investments to
keep the show growing, as Western politicians desperately want to happen.
In the end, we are not dead, despite what that cheerful Bloomsbury
intellectual, John Maynard Keynes, used to say. If he'd been born only a
generation later then he would have been aware of what modern
archeologists are now revealing -- the waning and (exuberant) waxing of
far more civilizations than he was aware of or could even have imagined.
Like it or not, the vast extension of our frontal lobes beyond that of any
other species has made us insatiably curious and creative, and there is
always the possibility of a new social and economic order arising from new
technologies.
Even though the 30-year decline in real Western median wages and
replenishable family size will probably continue for some time yet (while
some other countries catch up to our standard of living), the new science
of genetics and the new burgeoning DNA technology are already sketching
new methods of tapping into solar energy and describing social models in
which status can express itself without the constant purchase of new gewgaws.
Keith
Keith Hudson, Saltford, England
Keith Hudson, Saltford, England
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