Stuck in virtual slavery due to the lack of $0.22

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Is business a force for good, something that frees people, or is it something that enslaves?

I was recently talking to a couple of people about issues of injustice in the world, everything from perpetual poverty, human trafficking, and the inability to stand up to oppression. Their causes were numerous and their methods different but it comes down to oppression of one person by another. If you try dealing with it by rooting out the oppressor, it doesn't work because there is always another bully waiting in the wings. The only long term solution that we could see was eliminating so much opportunity for oppression by helping a person gain economic mobility, economic freedom, economic self determination.

It reminded me of the story of Muhammad Yunus the author of Banker to the Poor, he was a professor of economics and instead of telling his students about economic theory he got them out into the villages to talk to real people about economics. He tells of visiting some of the poorest households in the town of Jobra Bangladesh in the late 70s to gain an understanding of the economic situation of the poorest people in that village.

One day they stopped at a run-down house with crumbling mud walls and a low thatched roof pocked with holes. He made his way through a crowd of scavenging chickens and beds of vegetables to the front of the house. A woman squatted on the dirt floor of the verandah, a half-finished bamboo stool gripped between her knees, her fingers quickly plaiting the stubborn strands of cane. She was totally absorbed in her work. On hearing his greeting, she dropped her bamboo, sprang to her feet, and scurried into the house. (woman weren't supposed to talk to strangers)

It took a little while of complimenting her on her three children who were scurrying around the yard and assuring her that he was harmless and just wanted to ask some questions before she came back to the door and would talk to him while holding her baby. She was in her early twenties, thin, with dark skin and black eyes. She wore a red sari and had the tired eyes of a woman who labored every day from morning to night.

He asked her about the bamboo stool that she was making and how long it took to make one. She replied that she could make one per day and that at the end of the day she would sell it for 24 cents he was surprised at how little knowing how much those same stools went for in the market and on further questioning found out that each day she had to borrow the equivalent of 22 cents from the merchant in order to buy the bamboo material to make the stool and that the terms of the agreement were that she had to sell the stool back to that same merchant at the end of the day for the below market rate of 24 cents. This gave her a daily wage of 2 cents per day for every day she could produce a stool.

He left that interview and couldn’t sleep that night thinking about this woman who was a very industrious hard worker but stuck in this cycle of poverty because of the lack of 22 cents capital to buy the raw materials. Even if she was savvy enough to go to the bank and make a case for a loan they wouldn’t touch her. She was stuck dealing with the loan shark of a merchant who kept her in bondage because of their system of lending.

How would her children break the cycle of poverty she was in?

How could they go to school when the income she earned was barely enough to feed her, let alone shelter her family and clothe them properly? It seemed hopeless to imagine that her babies would one day escape this misery.

It seemed to him that the existing economic system made it absolutely certain that her income would be kept perpetually at such a low level that she would never save a penny and would never invest in expanding her economic base. Her children were condemned to live a life of penury, of hand-to-mouth survival, just as she had lived it before them, and as her parents did before her.

He thought about just giving her the money. That would be so simple, so easy. But giving one person twenty-two cents was not addressing the problem on any permanent basis.

Her life was a form of bonded labor, or slavery. The trader made certain that he paid her a price that barely covered the cost of the materials and was just enough to keep her alive. She could not break free of her exploitative relationship with him. To survive, she needed to keep working through the trader.

This was the instance that sparked the creation of micro-finance and micro-loans. Muhammad Yunus started a program of loaning out small sums of money to these extremely poor women, many of whom used that money to get out of this vicious cycle and started their own businesses.

Micro-finance has done a lot of good in many areas but its limitations of only providing loans has in some cases caused more damage and gotten the people into another different cycle of stuck. Because they didn’t address the other areas of need in those people and businesses who are stuck in the bottom of the pyramid.

Muhammad Yunus and micro-finance were needed and revolutionary but went only part of the way to addressing one of these issues and that is the access to capital and they only addressed it with loans.

Today there are many organizations that provide micro-finance; there are websites such as Kiva, IMicroinvest, and the Microloan Foundation. There are many very good things you can say about these efforts, but there are a number of weaknesses with these models.

• They only offer loans
• There is no real transparency, just a story and a picture
• There is no ongoing updates of involvement by the investor
• There is no mentorship
• There is no training
• There is no business support provided
• There is no helping the entrepreneur to network and make connections that would help them

Even with all these missing elements and the problems that have shown up in the micro credit industry this basic approach helped so many of the most vulnerable to injustice members of society achieve economic mobility giving them a measure of security from oppression.

The thing that enables bullies around the world to prey on the weak isn't usually their brute strength but their taking advantage of their preys economic circumstances.

In our conversation about issues of injustice, Micah mentioned that the most common way that human traffickers attract their victims is asking them if they would like a job or would like to make some money or would they like to to to the United States. All three questions praying on their economic situation. We have this image based on movies like Taken of human traffickers finding their victims via thugs kidnapping young girls but much more common is to offer their victim a way out of their situation and the victim willingly follows them.

So, is business a force for good, something that frees people, or is it something that enslaves?
Business can be a tool to oppress others as you can see by the loan shark of a merchant who kept the woman in virtual slavery through his business tactics. But again it's a tool, in the wrong hands it's a tool of oppression. But what if you give that same tool to those at the bottom of the pyramid?

What if we did more then just giving them 22 cents and walking away, what if we did more then giving them a loan, what if we addressed more then just the immediate apparent lack of resources? What if dealt with their sense of lostness and void in their life that only a savior can provide? What if we not only gave them resources but also came along side of them and gave them support, mentored them, gave them opportunity to put into practice, to try creating something, to be entrepreneurial, to take this tool of business and raise themselves out of their weak and vulnerable state?

Business can be a force for good when it's truly available to all members of society. When it's only in the hands of a few those few too often become the oppressors. Lets see if we can give this tool of economic freedom to those who to those who don't have it and see what a force for good business can be.


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