Thursday
February 12
2009

Rob Katz

Hammond vs. Karnani: Debating “Romanticizing the Poor” Part 1

Editor’s note: In December, Professor Aneel Karnani published an article in the Stanford Social Innovation Review entitled, “Romanticizing the Poor.” At the time, we posted about it here on NextBillion.net and suggested that our review of the article would be forthcoming; it has not, and for that, we apologize.

In the meantime, Staff Writer Moses Lee has provided his analysis of the article in his post, “Are the Poor Really Entrepreneurial?

What’s more, Professor Karnani and Staff Writer Al Hammond have engaged in a lively e-mail debate about the article. Both Karnani and Hammond have been kind enough to give permission to NextBillion.net to post the content of their debate here. The first installment – a post by Al Hammond – follows.

By Al Hammond

I’m writing this in India, having just spent the day in a rural part of Punjab seeing how a market-based strategy is bringing clean drinking water to villages that have had none. The point of the trip is to plan in detail how we leverage this successful BOP business to bring modern healthcare, as well as clean water, to low-income rural communities.

From this perspective, most of what Mr. Karnani says seems just silly—armchair theorizing. His numbers are wrong—as we have already explained in detail elsewhere, although he does not acknowledge the criticism. And he misquotes me and attributes words to me that I’ve never spoken, thus underscoring his questionable scholarship and the sloppy editorial work of the journal that published him. But it is his larger critique that is more troubling.

The poor make bad choices? Is it a bad choice when people agree to pay about $0.01 per person per day or $18 per family per year for clean drinking water, instead of drinking free polluted water with high fluoride content that makes them ill and ruins their joints? Would it be a bad choice to pay $2 for a DNA-based analysis that determines not only whether your fever is malaria or dengue, but also which version of the disease, so that the correct pill can be prescribed by a village healthpoint (pharmacy/clinic)—instead of spending a day without work getting to and waiting at the district hospital only to be given malaria medicine without a diagnostic test? And this is the dire consequence—clean water, good healthcare—he sees from bringing market-based solutions to such basic needs as water and healthcare that governments are not meeting?

Some 200,000 villages in India, one third of the total, lack any source of clean water, and only market-based solutions are likely to address a problem of that magnitude. I just had villagers tell me that they can see the improvement in their joints after less than a year of switching to clean water—and you couldn’t take that water plant away from them.

I don’t doubt that Karnani can find examples of corporate misdoing—probably no large multinational is perfectly “pure”, but last time I looked they also deliver lots of useful goods and services. And corporations are not the only organizations using market-based approaches with the poor these days—so are social entrepreneurs and NGOs. Indeed, my partner for the village healthcare business is an NGO that is already scaling the water business across 3 states, serving millions of people a day, and making money doing so. They and their customers live in the real world. Mr. Karnani does not.

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