An interesting take on the problem of global poverty from James Surowiecki at the New Yorker:
"The profit motive, indecorous though it may seem, may represent the best chance the poor have to reap some of globalization’s benefits. Through the years, the poor have received assistance from innumerable government agencies and nonprofit organizations, and they’ve been an exploitable labor source, but they have almost never been treated simply as customers. And that’s a pity, not because the private sector is inherently superior to the public sector but because, in the world we live in, businesses control an enormous amount of skill, manpower, and capital. If you’re a customer, you reap the benefits of all that. If you’re not, you don’t ...
Consumerism, of course, has its pitfalls and is hardly a cure-all. But if companies started trying to sell things to the poor it would have immediate consequences, chief among them a reduction of the so-called poverty penalty. It’s expensive to be poor. Poor people pay more to eat, buy, and borrow, because they have so few choices and so little bargaining power, especially in the developing world. Moneylenders, purchasing agents, and retail stores typically have local monopolies that allow them to gouge their customers. If more companies reach these customers, prices will fall.
There are, as ever, monumental prejudices and impediments to overcome. Executives scoff at pennies. Anti-globalization activists take customerization to mean McDonaldization. Then, you have to contend with the local monopolists who make huge sums of money selling to the poor, and the local government officials who profit from helping keep those monopolies in place. To tap the fortune at the bottom of the pyramid, we may have to “save capitalism from the capitalists" ...
Posted by Alan Allport at September 24, 2004 07:46 AMBut didn't K-Mart go out of business? Is there really room in ultra-poor markets for more than one globopoly?
Posted by: Alan Hogue at September 30, 2004 10:26 AM