>Posted by Josh Goldstein aka Mr. Provocative

It is striking to a regular reader of microfinance books and articles how little  global poverty is analyzed in terms of class differences and “man-made” political inequality. Indeed it appears to be very nearly absent from the literature.

The lack of discussion about the root causes of poverty is surprising but perhaps an understandable backlash against the cold war era when simplistic Marxist analysis of capitalism as the evil behind every planetary woe–including  the great divide between the haves and the have-nots–gave the search for causation a bad name. Is it a mere coincidence that the rise of a “grassroots capitalism” (aka microfinance—the provision of small amounts of capital to the self-employed poor) as a new approach to poverty reduction, came at a time when Marxism as an ideology was increasingly seen as a catastrophic failure? The two great Communist giants, the Soviet Union and China (along with their proxies) had failed to surpass, let alone equal—the living standards of people in the Western capitalist democracies. By the mid-eighties, after a decade of growing disillusionment, a bipolar world had lost one of its poles and the “hegemony” of capitalism seemed beyond dispute.

To the founding mothers and fathers of microcredit in the late seventies (many of them disillusioned lefties, who had morphed into reluctant capitalists) focusing on the “why” of inequality was unhelpful and stood in the way of a pragmatic approach to economic empowerment.

Never mind spending time trying to identify the complex social forces and entrenched interests that condemned the “masses” to poverty. Challenging the government or local elites to address underlying structural inequality of an unjust society was a waste of time, as the many revolutions in the fifties and sixties to end colonialism seemed to prove.

The mantra was beautiful in its simplicity: bring the building blocks of capitalism to the poor masses and economic empowerment and budding prosperity will follow. It all seemed very Horatio or (Henrietta) Alger—self employed masses of the world pull yourself up by the bootstraps. Your future prosperity is up to you.

 Have you read?

The Cell Phone Revolution and My Friend Hector

What Really Works (And What Clearly Doesn’t)
