Better and faster than politics
Thursday, September 22, 2005
Big business does much more to end global poverty than you might suppose.? Last summer I had a choice. On the one hand, I could take a senior role in a progressive think-tank at a fascinating time in British politics: the Blairite agenda was long in the tooth and the big questions – about justice, equality and nationhood – were proving themselves very much alive. On the other hand, I could join a consultancy helping international businesses sell to the world’s four billion poorest people.
The choice proved easy. Politics felt too slow, too laden with history, too redolent of hours spent in tedious circumlocution at student union meetings, and far too dogmatic. By contrast, the consultancy and its clients had passionate people who just wanted to get good things done.
Better still, the firm allowed me to get directly involved in economic development, which is usually the domain of governments and civil society. Set up to help large companies use a new development model that recognised the importance of the private sector in eradicating poverty, it was hands-on and progressive, it did a lot of good in a direct way, and it promised to be fun.
This was a personal choice and I’m not recommending it to anyone else, but it seems to me that it is relevant to some of the problems of modern politics. We all know that conventional party activism is in steep decline, just as voter turnout is falling and the public standing of politicians as a class is at a historic low. The blame is put variously on apathy and cynicism, on the media, and on celebrity and consumer cultures, but that is nothing like the whole story.
In a country where millions can be mobilised for a non-party cause such as Make Poverty History, and where NGOs of all sorts enjoy very broad support, there is no lack of sincerity or commitment. What may be lacking is a belief that politics is worthwhile, that it is a fruitful way of trying to do good – or at least, in a world of choice, that it is the best way of doing good.
Let me tell you about the firm I joined, The Next Practice. Its ethos is based on two premises. The first is that the world’s four billion poor represent an under-served consumer pool; individually they have little money, but their aggregate annual income, at $14trn, is larger than the US economy. The second premise is that the organisations best able to rapidly design and deliver the products and services that poor people need are the world’s multinationals.
There is more to this than the corporate social responsibility manifesto that has become popular in recent years. The bottom of the pyramid is a new competitive business space, with new demands. If you want to sell toothpaste to an Indian villager, you need to know that he may not have access to running water, that he can’t afford to throw away the packaging, and that your main competitors are the twigs from the neem tree.
Or take insurance. Selling insurance to an American earning $80,000 is one thing, but profitably selling it to that villager earning $500 a year is quite another. Yet it is the villager who most needs protection from the vagaries of life, whether it be ill-health, death in the family or bad weather.
There are successes at the bottom of the pyramid. In India, Aravind Eye Care, the world’s largest specialist eye hospital, performs operations at one-hundredth the cost of the same procedures in the US, but has higher rates of success than are found in western hospitals. Then there is microfinance: the idea that very small loans to poor people can substantially ameliorate their lives. Famously successful in Bangladesh, it has been taken up by India’s largest private sector bank, ICICI, which intends to reach 50 million people by 2007.
This is exciting, rewarding and fulfilling work to be involved in, holding out the promise of large-scale, profound change.
Am I saying that there is no role for government in this sort of work, that politics is useless? Far from it. Government and civil society – politics, if you like – are urgently needed to foster the basic conditions, such as physical security, that allow the poor to connect to the world economy.
But my choice has taken me a long way from politics and, in many respects, I feel detached from conventional progressive politics. To recognise that international capitalism has a paramount role in eradicating poverty requires the fresh thinking worthy of any policy shop. It means seeing the poor as resourceful entrepreneurs. It means recognising that the poor may improve their lot better if we treat them as consumers, rather than simply as citizens. It means recognising that business, even big business, is not necessarily a monster.
And it means that, on the question of global poverty at least, the practical must take precedence over the political.