Nelson Mandela’s Missing Dinner

Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings. And overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right, the right to dignity and a decent life. -Nelson Mandela

Experience with something does not guarantee one is an authority and correct in their understanding of that thing. Having cancer doesn’t make you an expert on its cause or solution!

The late Nelson Mandela may have experienced and worked with impoverished circumstances, but his understanding of it is completely wrong.

Mandela sits down at his dinner table for a meal. He looks down and sees his plate is empty. “Hey!” he says. “Who took my food!?” He expects food to be there—it is “naturally there”—and the only explanation that it’s not there is that it was removed. Perhaps accidentally, perhaps mistakenly, perhaps maliciously. Mandela thinks he is owed some dinner.

Consider a parallel situation of someone who just washed up on a desert island after a plane crash like in the movie Castaway. He doesn’t say at dinner time, seeing there is no food, “Who took my food!?” He knows claiming a “right” to dinner is ridiculous. He knows he is starting from scratch.

Mandela’s way of thinking and speaking assumes a backdrop of a well-functioning society, prosperous economy, and some amount of wealth as a “right.” This is wrong, and it obscures our vision of the only path to truly solve the problem of poverty, because it inclines the mind to look for the solution to poverty in the wrong place.

Thinking of poverty as unnatural and unjust inclines us to look to already-existing wealth (in someone else’s hands), rather than in the power of human creativity.

It makes us think of relocating existing wealth rather than creating new wealth.

It fosters envy rather than determination.

No one “made” poverty through unjust taking or withholding (at least the global, pervasive, enduring sort of poverty). So the problem is not how to go and acquire the wealth that is a supposed “right”; the problem of wealth is how to make it.

This is what Frontier Development aspires to do.

 

Market Segmentation at The Bottom of the Pyramid

Viewed from afar, it is easy to gloss over differences within general group. Imagine someone ignorant of and inexperienced with any sort of physical sport, who wants to open a “sports store” and sell “sports equipment.” “Which sports?” you might ask them. A business hoping to serve a group of customers needs to segment–to make relevant and useful divisions within–a large market to break it into specific enough chunks so that they each have a relevant commonality. This commonality allows a business to approach that chunk together, as a unit. You do not approach golfers and basketball players as a single group.

In Out of Poverty, Paul Polak makes a similar criticism of CK Prahalad’s approach in his influential book “The Fortune at the Bottom of the Pyramid”:

Unfortunately, Prahalad places the 4 billion people in the world who earn one, two, three, and four dollars per day all in the same boat at the bottom of the pyramid. Then he cites exemplary business–such as Casas Bahia in Brazil and Cemex in Mexico, which serve middle-class customers–as models for the role big business can play  in ending poverty. This is a bit like lumping together homeless people, people on welfare, social workers, schoolteachers, and nurses int he United State into one group at the bottom of the pyramid and citing a successful chain of Hyundai car dealers as an exemplary model for serving people at the bottom of the United States pyramid.

 

The Globe: Segmenting the Base of the Pyramid

“The 4 billion people at the base of the pyramid—whose output represents one-third of the world’s economy—are not a monolith.”

The article distinguishes the following three groups within the poorest 4 billion people (what follows is almost a continuous quote from the article, but converted to bullet point format):

Low income:

  • Roughly 1.4 billion with income of $3-5 per day
  • Couple years secondary education
  • Enjoy semi-regular incomes as construction workers, petty traders, drivers, or low-level staff in public and commercial establishments
  • Conduct their transactions in both formal and informal markets,
  • Live near or among the people who occupy the next layer up in the pyramid (above $5 per day)
  • Own such consumer goods as bicycles, televisions, and cell phones
  • Have a reasonable hope that they or their children will achieve a modestly higher living standard.

Subsistence

  • The bulk of the roughly 1.6 billion people who live on $1 to $3
  • Poorly educated and low skilled
  • Typically have some income as day laborers or temporary workers, earnings are not steady
  • Can typically afford one square meal a day, but the nutritional content is often substandard
  • If in slums or shantytowns, they might work as helpers or assistants in petty trade
  • If in rural areas, they are likely to be temporary, migratory farmhands during sowing or harvesting seasons
  • As both consumers and producers, they conduct transactions in informal markets
  • Turn to moneylenders for loans
  • Unlikely to reach a $5-a-day standard of living

Extreme poverty

  • The bottom 1 billion lack basic necessities: sufficient food, clean water, and adequate shelter.
  • War, civil strife, and natural disasters have displaced many from their homes.
  • They are forced into transactions that are irregular even by the standards of informal markets.
  • Some live in barter economies; others are bonded laborers.
  • Women often have to walk long distances along nonsecure pathways to fetch water.
  • Poor health, lack of nutrition, financial vulnerability, limited education, and a dearth of marketable skills
  • The precariousness of their daily existence precludes participation in the market as consumers or producers

“Ending Poverty” Is A Bad Idea

“Ending poverty” is a bad idea.

Should the goal of the poet be to “end blank pages,” or of a chef to “end empty stomachs”, a builder to “end vacant lots”?

While the meaning of such goals can be dimly understood, they are not clear. They implicitly give positive reality to what is actually a lack or an absence and cast a very strange vision about what is to be done to accomplish such “endings”:

Shall the poet gather all blank pages and burn them in a fire so that poetry emerges?

Shall the chef surgically remove all empty stomachs and delicious feasts emerge?

Shall the builder take a magical wrecking ball and crash down the vacancy, revealing a building in its wake?

The point is to be clear in our language to help us be clear in our thinking to help us be effective in our action.

These various lacks or absences need not to be ended, but to be filled.

The poet should fill blank pages with poetry, the chef fill empty stomachs with food, the builder fill vacant lots with buildings.

Poverty shouldn’t be ended, it should be filled.

Poverty is like an empty page waiting for poetry, an empty stomach waiting for good food, and a vacant lot desiring a building.

The task of filling up poverty with wealth falls to the producers, the wealth-makers, the entrepreneurs of the world whose role it is to transform the raw stuff of world for the good of mankind.

While the phrase “ending poverty” or “fighting poverty” has sadly become a common and therefore easy and necessary way to indicate something of the general intention of improving the lives of the very poor of the world, such ill-conceived phrasings are not as true and useful as “filling poverty” or “making wealth” or “creating prosperity.”

So let’s start creating, and stop trying to do something as silly as ‘ending poverty’.

problem with pralahad

Somewhat the idea of CK Pralahad in “The Fortune at The Bottom of the Pyramid”–recognizing that even though the poor have little money with which to purchase things, they are an undeserved market that possesses significant buying power that is worth serving through appropriate product development.

This has the potential to free up income or potentially increase income through freed up time that can be used in paid labor.