Hope for Slum Communities: Economics
by Scott BesseneckerExcerpted from forthcoming The Quest for Hope in Slum Communities,
Reprinted with permission ISBN 1932805-192 World Vision Press in partnership with Authentic Media
expected publication date Summer 2005
Community Development
Economics
Ethnicity
Credit card companies are built on the premise that we will borrow more money than we can pay back. They want us to be locked into a pattern of forever paying on our debt and never paying it off. When God established the nation of Israel, he required loans to be settled within seven years. “At the end of every seven years you must cancel debts” (Deuteronomy 15:1). Any loan that was not paid off in seven years would be forgiven. This ensured a number of things. Firstly, it made sure that no family would ever become indentured servants to another family. Israelites were commanded to not put one another in a position of unending debt, particularly those who found themselves in the unfortunate situation of a crop failure or a devastating natural disaster or their entire herd of livestock being wiped out by disease. Secondly, this law kept the playing field relatively level. Nobody could get extremely wealthy from another person’s desperation, and no child would inherit the poverty of parents who could not pay their debts. This is especially evident in the jubilee law, which required that every fifty years the land reverted to the original distributions laid out in the book of Joshua. Families could not amass land holdings. Thirdly, it held in check the amount of capital that people were willing to loan. Most loans would have been small and manageable. If you wanted to mobilize a lot of resources, you would have to do so gradually, building capital with small amounts slowly over time. Finally, it tied the destiny of the rich lender to that of the poor borrower. If the borrower failed, the rich would lose the loaned money. It is a healthy thing for the rich to be tied to the poor, so that the rich become more intimately concerned with the success of the poor.
So much of the world’s prostitution, drug dealing, theft, and terrorism are fueled by poverty. And so much of the world’s poverty today is passed down generation to generation by indebtedness, keeping whole family lines trapped in a cycle of destitution. We have yet to devise an economic system that keeps the powerful from making rules that benefit themselves financially. Biblical economic ideas often center on wealth as something that is managed rather than amassed. Wealth is leveraged, not consumed. In the Bible, money is both personal and social.
Microcredit is a great way to live out the biblical principles surrounding money. Small loans circulating through a poor community are leveraged to create wealth for those locked out of the banking system. Makonen Getu enumerates several of the benefits of microcredit in Poverty Alleviation and the role of Microcredit in Africa from Faith in Development edited by D. Belshaw, R. Calderisi and C. Sugden, Oxford: Regnum pp. 165-179. The tangibles of opportunity and self-reliance are described alongside the intangibles of hope and self-esteem. Yet setting up small loans for entrepreneurial poor families to utilize in starting a business does not work well without a good support structure. Getu describes the role of the government, donors, and the church in helping to expand the role of microcredit in moving people out from under the crushing weight of poverty.
Prahalad and Hammond take an entirely different approach in Serving the Poor Profitably, Harvard Business Review, 2002. They see the poor as a viable market, not to be exploited but to be served and engaged in creating wealth. Though not arguing from a Christian frame of reference, their insight is revolutionary. Although the poor have few resources, they do have some, and because of their numbers, they have incredible aggregate power. The poor are, by and large, willing to work hard. The poor end up spending more on certain basics like water and food than even the rich do. What’s more, the poor do consume many items considered to be luxury items. While I do not advocate encouraging materialism and consumption, the authors make an excellent case that the four billion people of the world making less than two thousand dollars a year represent a market that is willing to work and willing to pay fair prices for a great many goods and services.
Profit is not evil. Making a reasonable profit for a product or a service is healthy for society. The poor are not served well by handouts, subsidies, and below-fair-market interest rates. They are individuals and communities of value and strength who lack the means and opportunities to leverage their gifts and ingenuity for the greater good. Creating wealth among the poor need not be a choice between charity and exploitation.
Community Development
Economics
Ethnicity
Unless otherwise noted, all materials on the urbana.org web site are Copyright InterVarsity Christian Fellowship / USA. All rights reserved.
Print
Email
Comments
Be the first one to add a comment.
To post a comment, please login or register