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Thursday, July 17, 2008

What is Called Development?: Exploring the Nexus of Economy

By Joseph Bornstein

ThoreauI recently had the pleasure of attending a presentation by Al Hammond which detailed his plans for revolutionizing rural medicine and access to telecommunications in developing nations. Here is a condensed rendition of the picture he painted: The majority of rural communities in developing nations have no access to telecommunication systems, and this is a problem considering that telecommunications are an essential tool for offering the poor services and possibilities that they would otherwise not have access to. The communications gap can be bridged by installing wireless access hubs in remote communities and?the hand of wireless technology could leapfrog reaching almost any community at a cheap price.

This innovation opens a whole new market for cell phone companies and offers yet another excellent pipeline for BoP development and for getting a share of the fortune at the base of the pyramid. This is what we in the BoP community would call a double bottom-line profit model because the business plan is not only economically profitable, but also reaps social benefits by providing the services of telecommunications to poor rural communities. In this model, social justice meets capitalism. They shake hands, and build a better tomorrow.Like many bad things, the concept sounded fantastic at first. But then, I found myself stopped in my thinking's tracks when the presenter remarked that the natural progression of services provided by this newfound rural telecommunications industry would be as follows: First there would be mobile banking. Then, education services. Lastly, entertainment would inevitably enter the market. This progression, if we can all it "progress" invokes Henry D. Thoreau's critique of the technology boom that took place during the industrial revolution in US America. Noting the difference between economies which are framed in terms of ends that are truly valuable, and economies framed in terms of ends that offer the mere illusion of value, Thoreau writes:

"Even the poor student studies and is taught only political economy, while that economy of living which is synonymous with philosophy is not even sincerely professed in colleges. The consequence is, that while he is reading Adam Smith, Ricardo and Say, he runs further into debt inevitably. As with our colleges, so with a hundred "modern improvements;" there is an illusion about them; there is not always positive advance . . . . Our inventions are wont to be pretty toys, which distract our attention from serious things. They are but improved means to an unimproved end, . . . . We are in great haste to construct a magnetic telegraph from Main to Texas; but Maine and Texas, it may be, have nothing important to communicate (Walden, 50)."

Thoreau does not say that we should refrain from studying and employing concepts of political economy, but only that such endeavors are void of actual purpose if not grounded by an economy of living/philosophy. In order that political economies can empower us to be richer individuals, they must aid us in achieving a worthy and good end-not just another "modern improvement" presented in the guise of a better life.

I believe this critique to be just as applicable to the development community of the 2000s as it was to the US in the 1800s. Thoreau asked whether the telegraph communicated anything of importance, and I find myself asking the same question about bringing cellular phones to remote rural communities. What if there is nothing of import to communicate from urban areas to rural areas and vice versa? And while we are on the subject of reevaluating the meaning of the word "poor," what if we are making people poorer by providing services that are actually positive hindrances to reaching an end of true value? In this whole pursuit of "development," what if we've forgotten to consider an economy of living that grounds the purpose and value of our political economy?

If we are to take Aristotle's notion of happiness as the final end-that which makes a person truly rich-can we say that telecommunications makes its customers happier? Based on those close to me, especially those with Blackberries and other means for accessing the full power of connectivity, it seems that perhaps telecommunications may make people less happy, or, shall we say poorer.

In this regard, a CEO of an environmental consulting firm (he will remain unnamed) told me a story about an electricity project that his company launched some years back. The company, we'll call it "BoP-Star," had been contracted by the government to complete a project to provide a remote rural community with the service of electricity via renewable power. His perspective of the community's overall happiness before the project was quite high, which was part of what inspired him so deeply to do a good job. And a good job he did. Within a few months the project was complete, and he returned home to the States. Due to his affinity for this community, he returned several years later and found that the service of electricity had made the community poorer in overall happiness by no small amount.

Before the electricity project, the community's cohesiveness was high. Everybody was in the same sleeping pattern because their body's rhythms followed that of the sun. This basic foundation of a shared sleep-cycle provided an essential groundwork for people to partake in daily life as a closely linked community. With the electricity project came a new sleep cycle along with increased hours of so-called productivity. Electronic entertainment such as TV also entered the culture and people started wanting things that they had never even seen or imagined before, suddenly finding their old way of life to be shallow and boring. Due to this drastic decline in the quality of life within the community and the mentality-shift fostered through electricity, my friend regretted the project he had spearheaded because it had made the community genuinely poorer.

Though I find a strong lesson in the story above, please do not take me as being against community and rural development. In fact, I have dedicated a good amount of my energy to the cause. The point I intend to make is that technological solutions as well as solutions grounded solely in political economies are not solutions at all, but rather the introduction of good or service that distracts us from things which enable people to lead richer lives. This distinction between a political economy and an economy of life offers the potential to invert our perspective on BoP development and show us that we need to begin with an appropriate philosophic framework before considering any project.

It also shifts a large degree of the focus regarding what needs to change away from the BoP itself, reaching to the middle of the pyramid (MoP) as well as the top of the pyramid (ToP). Perhaps it is not the BoP that needs to modernize, but rather the middle and top of the pyramid that needs to downscale and adjust its way of life so that the very structure of our economy and livelihood does not marginalize the poor and destroy the ecosystems upon which so many rely.

Many people offer the argument, "but we are simply providing services to fulfill poor people's wants and desires." I answer that many of those wants did not exist before the product to fulfill that want was there, and that it is not until the product of luxury is offered that it becomes desired, and it is not until it is introduced that people perceive themselves as dependent upon it for a good life. Take air-conditioning: Before we had AC we just made do with the heat. Once AC was introduced and once we acclimated to it, living in Texas, for example, became "unbearable" without AC to keep us cool.

And at this juncture, I often am presented with the argument, "But the genie is already out of the bottle. Technology and development are here, and people, even in remote communities are hearing about it. It's happening and there is no turning back." I do think that this point is quite true. It seems that communication technologies and information sharing has entered into the mainstream of how it is that humans think and live. This does not mean, however, that we should blindly place the majority of "development" on technological solutions. Rather it is an opportunity to focus on the appropriate nexus between an economy of life and a political economy.

It is only through thinking in this holistic fashion, some would even call it whole systems thinking, that we can do development that actually makes people richer.

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