There have been two economies operating for too long and the dominant one has been excluding the majority of the humans on this planet. When it did include the poor, it abused them with subprime loans, no profit-sharing, then divided up their hard-earned cash into abstract financial products they all sold back and forth to one another until it all came tumbling down. Who is hurt the most from this? The poor! And then all of the rest of us! No wonder people are taking to the streets during the G20 this week. But in some parts of the world, the poor are actually creating a bottom of the pyramid up more sustainable economy. We need to pay attention!
In his book, Creating a World Without Poverty: The Future of Capitalism, Muhammad Yunus states that on a multi-lane super-highway with no traffic lights, and high-speed cars zooming past, smaller, slower vehicles are pushed off the road. Yet these same vehicles are perfect for rural, local distribution, and there are many, many of them, and thus they serve a huge part of the world. A parallel can be drawn as the micro-economies served best by these rickshaws and small cars, trucks, bicycles and buses and the economic infrastructure which includes: microloans, tiny factories and poor men and women acting as micro-distributors, are unable to get a foothold into the global economy. Yet they work perfectly well on a micro-level. In fact, major corporations distribute their products via these localized systems.
The result is that the profits made by the conglomerates go back to the West, and the ownership remains in the hands of the developed world, yet the growth is coming from the poorer parts of the world or "Emerging Markets", BRIC, etc. The wealthy countries don't know how to do micro-distribution best, the local people do. They know their villages and their customers and what they need and how and where and when they need it They have kept intact something we (in the so-called wealthy "developed" world) have lost for the most part because we have grown so big, and merged so much, and swapped and flipped and leased our way into an economy which does not make concrete sense. The human element is missing. In much of the developing world, trust is still in place, especially where microcredit (tiny loans made to the poor with no collateral) is being used. Trust and the human element make the system work. If there is a breakdown in trust, it all falls apart. Peer pressure and community factors into the repayment and the business growth. We in the West have lost much of this connectivity in our economies, even as we social network our way across the internet, we actually have less, not more human connection.
Yet we profit from these countries, returning much of that money to the West. In the case of the World Bank, the contracts and high salaries of the Fourth Sector elite funnel through to Geneva, DC and New York, not Dhaka, Addis Ababa and La Paz. In the case of commercial ventures, the shareholders on the other side of the globe make money off of this intimate knowledge of micro-distribution. We profit from their human connections. This is a huge area of potential growth for these countries, and if handled well, they themselves could actually benefit more often than not from their greatest resource, their own people. And there is something to learn from this: We in the West also need to remember that the economy is made by and for the people, not simply to suck profits from us. Companies may be incorporated, but they are not humans -- they are made to serve humans, not vice versa!
What if the developing world continued to capitalize on this human element which we have lost, (and many of them are doing so) and owned their own businesses, created their own products, instead of simply being sold what we choose to sell to them? Why return so much of the profits to the West? Why not own one's future instead of being colonialized economically, and dependent upon the Western companies supplying everything from pharmaceuticals to entertainment, or by Western contracts imposed by the World Bank and the forced indebtedness of the IMF? Why not set up more local businesses? Why not make more partnerships or social businesses as described by Muhammad Yunus, and create medical schools, telecom companies and Danone type tiny yogurt factories, with its infrastructure of microdistribution and pulling women and their families out of poverty?
Slowly this is happening with increased access to microcredit. In some cases microfinance comes in from the West and infuses larger amounts of cash in what they often call the "Michael Dells" of the future. But what we need to make sure of is that these countries own their own future, that they own their own telecoms, and make and distribute their own content, and build their own businesses. Otherwise we are simply repeating a broken pattern which we see does not work. The future of the world's economy must be inclusive! And this is true for wealthier Western countries as well. It is because the economy and the profit-sharing is NOT inclusive that we will see thousands of people in the streets in London during the G20 talks this week.
We need to reset the balance even within our own countries and remember that first and foremost we are human beings, not simply consumers. In order to do as Yunus says and "Create a World Without Poverty" and Build this sustainable version of "The Future of Capitalism" we need to return to the roots of capitalism, to those human connections, to trust in banking and to concrete production. We need to say goodbye to economic abstractions and colonialism. We need to look at places like Africa not as simply potential natural resources to be pillaged by companies which return most of their profits to the wealthy parts of the world (or the corrupt local officials,) but as full of human connectivity and local knowledge...places where human are highly creative.
As Muhammad Yunus says, "Humans are not simply money-making machines!" Now let's go out and make that better world. We have seen what happens when Capitalism runs amok and is not inclusive. The problem is not capitalism, it is greed and the lack of the human element. Let's bring it back before it's too late.