Easier said than done, but some initiatives have succeeded. Here is an extract form my book “World without War, made possible by empowered individuals”.
“Poverty is a major cause of unrest and over-population in the world. To own property is one of the most basic incentives for people to be able to help themselves. This does not need to be a plot of land; at its most basic, it may be a herd of goats, or a sewing machine.
“Economic theorists have always recognised the importance of secure property rights in creating the right incentives to produce and invest.”
Secure property rights played an important role in the rise of western Europe’s economies, and students of less developed countries and ‘transition economies’ reinforce this lesson. The creation and support of property rights are the responsibility of governments, and by corollary, their loss is often caused by dictatorial governments driven by communist policies, or by greed, power or racial discrimination, with no understanding of economic principles. Communism has failed as a result, although the People’s Republic of China (PRC) is managing a slow transition to capitalism by a gradual process. Her economy in the south east of the country at least is adopting some of the capitalist methods of transacting business in accordance with WTO rules, albeit with government capital under licence. The recent ruling in the PRC to permit private ownership of land is a further step away from communism in its strictest form. The transition is however likely to be associated with considerable unfairness and continuing hardship, as it appears that many properties were acquired from very poor peasants simply by displacement without compensation. In the end, to be accepted more widely, the PRC will need to be seen to conform even more to WTO and UN requirements for fair trading and human rights.
The Grameen Bank in Bangladesh through its founder, Muhammad Yunus, was awarded the Nobel Peace Prize 2006 ‘for their efforts to create economic and social development from below’. His bank has initiated the worldwide trend of the introduction of micro-credit, loans for very small amounts to assist poor people to get started. The Grameen Bank of Bangladesh formally began operating as a specialised credit institution in 1983, although its history can be traced back to an innovative pilot project that began in 1976. The bank gives small-business loans to the poorest of the rural poor on a group liability basis instead of requiring any collateral. Because they have no collateral, the Grameen Bank borrowers do not have access to conventional sources of finance. This is seen as a major tool in the battle to break the cycle of poverty for millions of people around the world. ”
Infrastructure in the third world is just as important as education. A farmer needs to be able to transport his produce efficiently to market, which requires at least a path for a horse or ox drawn cart, or even a bicycle. If this farmer has to rely on a buyer to come to his property to buy, the price will never be satisfactory, but at a market place, the comparison with others will create better fairness.
Another way to assist in third world and developing countries, is by Moral Capitalism. This is the way socially responsible corporations utilise the low wages available in those nations, and at the same time supporting the development of infrastructure, education and training, by helping to reduce corruption, and engaging local suppliers and subcontractors. The result will be a growing economy and increasing access to the international market.
Corporations of this type have formed an institution, “The Caux Round Table”, that has established the principles to achieve such moral capitalism since shortly after WWII. Moral Capitalism: Reconciling Private Interest with the Public Good
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