[sociate] NYT - Tierney - Shopping for a Nobel

  • From: "Jerry Michalski" <jerry@xxxxxxxxxxx>
  • To: "Al Chang" <alchang@xxxxxxxxx>
  • Date: Tue, 17 Oct 2006 04:04:06 -0400


Shopping for a Nobel 
Published: October 17, 2006

I don't want to begrudge the Nobel Peace Prize won last week by the Grameen
Bank and its founder, Muhammad Yunus. They deserve it. The Grameen Bank has
done more than the World Bank to help the poor, and Yunus has done more than
Jimmy Carter or Bono or any philanthropist.

But has he done more good than someone who never got the prize: Sam Walton?
Has any organization in the world lifted more people out of poverty than

The Grameen Bank is both an inspiration and a lesson in limits. Compared
with other development programs, it's remarkable for its large scale. Since
it was started three decades ago in Bangladesh, it has expanded to more than
2,000 branches. Its micro-loans, typically less than $150, have helped
millions of villagers start small businesses, like peddling incense or
handicrafts at the local market, or selling milk and eggs. 

The economist William Easterly, who was afraid Bono was going to get this
year's Nobel, calls the bank's prize "a victory for the one-step-at-a-time
homegrown bottom-up approach" to development. That approach is a welcome
contrast to the grandiose foreign-aid schemes that do more harm than good,
as Easterly documents in his book, "The White Man's Burden." 

But there's a limit to how much money villagers can make selling eggs to one
another - a thatched ceiling, as Michael Strong calls it. Strong, the head
of Flow, a nonprofit group promoting entrepreneurship abroad, is a fan of
the Grameen Bank, but he figures that villagers can lift themselves out of
poverty much faster by getting a job in a factory. 

The best way for third world villagers to tap "the vast pipeline of wealth
from the developed world," he argued in a recent TCSDaily.com article, is to
sell their products to the world's largest retailer, Wal-Mart. Strong
challenged anyone to name an organization that is doing more to alleviate
third world poverty than Wal-Mart. 

So far he's gotten a lot of angry responses from Wal-Mart's critics, but
nobody has come up with a convincing nomination for a more effective
antipoverty organization. And certainly none that saves money for Americans
at the same time it's helping foreigners.

Making toys or shoes for Wal-Mart in a Chinese or Latin American factory may
sound like hell to American college students - and some factories should
treat their workers much better, as Strong readily concedes. But there are
good reasons that villagers will move hundreds of miles for a job. 

Most "sweatshop" jobs - even ones paying just $2 per day - provide enough to
lift a worker above the poverty level, and often far above it, according to
a study of 10 Asian and Latin American countries by Benjamin Powell and
David Skarbek. In Honduras, the economists note, the average apparel worker
makes $13 a day, while nearly half the population makes less than $2 a day.

In America, the economic debate on Wal-Mart mostly concerns its effect on
American workers. The best evidence is that, while Wal-Mart's competition
might (or might not) depress the wages of some workers, on balance Americans
come out well ahead because they save so much money by shopping there. 

Some critics, particularly ones allied with American labor unions, argue
that the consumer savings don't justify the social dislocations caused by
Wal-Mart's relentless cost-cutting. They'd rather see Wal-Mart and other
retailers paying higher wages to their employees, and selling more products
made by Americans instead of foreigners. 

But this argument makes moral sense only if your overriding concern is
saving the jobs and protecting the salaries of American workers who are
already far better off than most of the planet's population. If you're
committed to Bono's vision of "making poverty history," shouldn't you take a
less parochial view? Shouldn't you be more worried about villagers overseas
subsisting on a dollar a day? 

Some of them prefer to keep farming or to run small local businesses, and
they're lucky to get loans from the Grameen Bank and its many emulators. But
other villagers would prefer to make more money by working in a factory. If
you want to help them, remember the new social justice slogan proposed by
Strong: "Act locally, think globally: Shop Wal-Mart." 


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