Saturday, 30 December 2006

The Egalitarian Ideal

Is egalitarianism an unattainable, and thus naive, pointless abstraction, or is it a principle central to the American ideal? Politics always involves an interplay between philosophical abstractions and pragmatic concessions to reality. That is as it should be. We err terribly if a recognition of non-attainability leads to the abandonment of ideals.

In our personal lives, horizons are necessarily limited, and lofty goals often must be scaled back or altered in order to set new goals which are indeed attainable. Sadly for some, that means abandoning not only the unattainable goal, but also the worthy ideal which buttressed it. But for others it means balancing the ideals with realism, and achieving something that can make a difference, rather than overreaching and achieving nothing, or giving up and substituting lofty goals with cynical opportunistic ends.

Our nation's history serves as a testament to the worthiness of the egalitarian ideal, boldly written into our Declaration of Independence, but incrementally approached as two centuries saw the extension of the vote to non-land owners, then an end to slavery, then women's suffrage, and further progress in the mid-twentieth century in the rights of minorities. As Martin Luther King Jr, who participated in creating that progress noted in 1967, "the arc of the moral universe is long but it bends toward justice." Formalization of an ideal, such as that written into the Declaration of Independence can have a lasting influence in moving toward that ideal, however unattainable the ultimate manifestation of the ideal can be.

Of course, there will always be inequities. There is wisdom in the oft heard counsel that "life isn't fair" and we do well to recognize that early. But that does not mean that fairness should be thrown away as a value, nor does it justify mistreatment of our fellow human beings, just because absolute equality is unattainable. No matter how much someone may buy into the notion that making things fair is a hopeless proposition, it always seems they will still be acutely aware when they are not dealt a fair hand.

The egalitarian ideal has been held up by people of various political stripes throughout America's history, and adopted broadly in many parts of the world as a worthy goal. No philosophy or party has the market cornered on it, nor do I wish for that, but for much of the last century Democrats have been more consistent than Republicans in holding it up as central to the American dream, and it is largely due to that emphasis that my own identification has remained that of a Democrat throughout my adult life. My party's candidates stumble and fail frequently enough, but the egalitarian ideal remains an American ideal to which I hope the Democrats can hold fast as we approach the future.

And let us all, Democrats, Republicans, Independents, and others alike, continue to hold ideals and vision as a beacon to guide our policy and politics as we grapple with the realities in our imperfect world.

Happy New Year!

Thursday, 14 December 2006

Yunus: Poverty is a threat to Peace

The Nobel committee chose wisely this year when they awarded the Peace Prize to Muhammad Yunus, whose Grameen Bank revolutionized credit and proved that poor women of Bangladesh were better credit risks than wealthy men in suits from New York. Yunus' acceptance speech last weekend, heard on Democracy Now, tells the story worth repeating:

"This year's prize gives the highest honor and dignity to the hundreds of millions of women all around the world who struggle every day to make a living and bring hope for better lives for their children. This is an historic moment for all of them. By giving us this prize, the Norwegian Nobel Committee has given important support to the proposition that peace is inextricably linked to poverty. Poverty is a threat to peace.

World's income distribution gives a very telling story. 94% of the world income goes to 40% of the world population, while 60% of people live only with 6% of the world income. Half of the world population lives on two dollars a day.

The millennium began with a great global dream. World leaders gathered at the United Nations in 2000 and adopted, among others, a historic goal to reduce poverty by half by 2015. Never in human history had such a bold goal been adopted by the entire world in one voice, one that specified time and size.

But then came September 11 and the Iraq war, and suddenly the world became derailed from the pursuit of this dream, with the attention of the world leaders shifting from the war on poverty to the war on terrorism. ’Til now, over $530 billion has been spent on the war in Iraq by the USA alone.

I believe terrorism cannot be won by the military action. Terrorism must be condemned in the strongest possible language. We must stand solidly against it and find all the means to end it. We must address the root cause of terrorism to end terrorism for all time to come. I believe that putting resources into improving the lives of the poor is a better strategy than spending it on guns.

Peace should be understood in a human way, in a broad social, political and economic way. Peace is threatened by unjust economic, social and political order, absence of democracy, environmental degradation and absence of human rights.

Poverty is the absence of all human rights. The frustrations, hostility and anger generated by abject poverty cannot sustain peace in any society. For building stable peace, we must find ways to provide opportunities for people to live decent lives. The creation of opportunities for the majority of the people -- the poor -- is at the heart of the work that we have dedicated ourselves during the past 30 years.

I became involved in the poverty issue, not as a policymaker or as a researcher. I became involved because poverty was all around me, and I could not turn away from it. In 1974, I found it difficult to teach elegant theories of economics in the university classroom, in the backdrop of a terrible famine that was raging in Bangladesh. Suddenly, I felt the emptiness of all those theories in the face of the crushing hunger and poverty.

I wanted to do something immediate to help people around me, even if it was just one human being, to get through another day with a little more ease. That brought me face to face with poor people’s struggle to find the tiniest amounts of money to support their efforts to eke out a living.

I was shocked to discover a woman in the village, borrowing less than a dollar from the money lender, on the condition that he would have the exclusive right to buy all she produces at the price that he decides. This, to me, was a way of recruiting slave labor.

I decided to make a list of the victims of the money lending in the village next door to our campus. When my list was complete, I had names of 42 victims, who borrowed a total amount of $27. I was shocked. I offered this $27 from my own pocket to get these victims out of the clutches of the money lenders.

The excitement that was created among the people by this action got me further involved in it. If I could make so many people so happy with such a tiny amount of money, why shouldn’t I do more of it? That’s what I have been trying to do ever since.

The first thing I did was try to persuade the bank located in the campus to lend money to the poor. But that didn’t work. They didn’t agree. The bank said that the poor are not creditworthy. After all my efforts for several months, when it failed, I offered to become a guarantor for the loans to the poor.

When I gave the loans, I was stunned by the result I got. The poor paid back their loans on time, every time. But still, I kept confronting difficulties in expanding the program through the existing banks. That was when I decided to create a separate bank for the poor. I finally succeeded in doing that in 1983. I named it Grameen Bank or Village Bank.

Today, Grameen Bank gives loans to nearly 7 million poor people -- 97% of them are women -- in 73,000 villages of Bangladesh. Grameen Bank gives collateral-free income-generating loans, housing loans, student loans and micro-enterprise loans to the poor families and offers them a host of attractive savings, pension funds and insurance products for its members.

Since it introduced them in 1984, housing loans have been used to construct 640,000 houses. The legal ownership of these houses belongs to the women themselves. We focused on women, because we found giving loans to women always brought more benefits to the family.

In a cumulative way, the bank has given out a loan totaling about $6 billion. Repayment rate, 99%. Grameen Bank routinely makes profit. Financially, it is self-reliant and has not taken donor money since 1995. Deposits and own resources of Grameen Bank today amount to 143% of all outstanding loans. According to Grameen Bank's internal survey, 58% of our borrowers have crossed the poverty line.

Grameen Bank was born as a tiny homegrown project run with the help of several of my students, all local girls and boys. Three of these students are still with me in Grameen Bank, after all these years, as its topmost executives. They are here today to receive this honor you gave us.

This idea, which began in Jobra, a small village in Bangladesh, has spread around the world. There are now Grameen-type programs in almost every country in the world.
The photo of the weaver comes from this 2002 article on Yunus and microcredit from Sustainable Times.