Finally managed to tick off one of those aggravating perpetually-delayed items on Ye Ol’ To-Do-List — poring through most of Muhammad Yunus’s wonderful book on the foundations of microcredit in the developing world, Banker to the Poor. The belatedness was even more irksome this time since yours truly got it as a gift, with that all-too-slippery “I’ll definitely read this” pledge issued both to giver and self. (Thank goodness for prolonged shift changes and those holiday-weekend traffic jams that force you off the road to a seedy diner in Mid-Nowhere with nothing to do but finally plow through that long-delayed promise-I’ll-read-it tome that you’ve been cuefully keeping in your frayed old briefcase. Hey, wait, that’s just me?)
What’s most striking about Dr. Yunus’s opus is the emotional juxtaposition that rattles in your head as you turn the pages, especially about halfway through. On the one hand, it’s inspiring in that rare, 200-proof antidote to cynicism kind of way, to glimpse both the author’s determination (and acumen) in implementing such an innovative system, and the opportunities suddenly materializing to countless people otherwise stuck in the kind of vicious-cycle destitution that drives away lenders and begets more of the same. On the other hand, you can’t help but be mentally clothes-lined by a nasty sense of boundless wasted potential, which quickly transmogrifies into one of those Freakonomics-ish suspicions that our standard economic metrics tend to miss something really fundamental here.
What Dr. Yunus and his colleagues achieved with their microcredit efforts was an incipient, often crude, yet genuine realization of the same aim that blazes trails for us in fields like bioinformatics or operations research: collating and unleashing the wisdom of the crowd. The structures that Dr. Yunus established for micro-lending — heck, his belief in its prospects alone — were openly mocked, largely because few could conceive of the added value that would be generated by the networks so created. Whether explicit or not, however, Dr. Yunus’s key insight was that the wellspring of value in the micro-lending networks was a core source of wealth creation that had been hitherto largely ignored: the local knowledge and subtle, often intangible communications networks among the people (particularly the women) in even the poorest of villages in the Third World. His microcredit, in effect, became a catalyst to break the “activation energy barrier” (chem analogies never die) that prevented this latent wealth from transforming into more palpable, easily-quantified economic networks.
So what’s the indispensable lesson-of-the-day to take home and chew on here? Well, it’s something with a far more global and geopolitical significance than the book’s local color might initially suggest.
Consider this Public Policy Puzzler for a moment: How can we reliably judge the viability of a country’s economic, social, and political system? This may sound like one of those questions with a 1,001 valid answers, but there’s probably a simple and elegant test to gain at least a rough gauge of an answer: Can said nation maintain its fiscal standing and social stability in the absence of natural resources? Historically, the wealth of nations has been inextricably linked to the commodities that they could mine or dig up on their own soil, or the commodities they could mine or dig up on someone else’s soil (aka imperialism). Even if you’re not a card-carrying member of Club Peak Oil, it’s undeniable that for the first time in human history, those resources are running out across the board, and our economies can no longer depend on them. Unfortunately, many of the implicit economic assumptions that underlie the world’s societies are based on a presumption of natural plenitude. This is especially true of a once-frontier nation like the United States, which had not only abundant land but also (well into the 1950s) the enviable status of being the world’s largest oil producer.
Therein lies the rub — we can’t create much wealth with the dig-ables and the mine-ables anymore, so where does it come from? The answer is, well, it’s wicked tough. To date, there are really only a handful of nations that have managed this difficult feat: the Scandinavian countries and Finland, South Korea, Germany, Estonia, the Czech Republic, Taiwan, Singapore, Japan, Austria, Switzerland, and a handful of other countries clustered mostly on the Pacific Rim or Central Europe. What do they have in common? They’ve held on to their manufacturing and refused to outsource their high-tech industries, they’re “social capitalist” (Steven Hill’s term) mixed economies in design, they have heavy investment and subsidies in human capital (esp through education and health care), and they’ve managed a delicate balance of vigorous entrepreneurialism with social cohesion and community solidarity. In other words, their wealth stems in effect from the same source that Dr. Yunus learned so cleverly to tap: sophisticated and evolving networks of human knowledge and communication in tight-knit communities. And lest we be tempted to minimize the tangible value of these structures, consider that Germany — population at about 83 million or so — despite having almost no natural resources, has the world’s second-largest export economy, behind only China (population 1.3 billion) and larger than ours in the US (population roughly 320 million).
What we’re glimpsing with these scattered examples are the first hints of economically-viable systems in a resource-poor world. And “glimpsing” is used deliberately here: In effect, economies across the globe will increasingly be depending on their ability to better connect up and harness the individual minds of their citizens, to engender the kind of “collective mind” that far exceeds the sum of its parts, or even what we can fathom as individuals.
If you want to get all philosoph-y about this challenge, it beats a path straight back to Mr. Epistemology himself, Professor Immanuel Kant (and to an extent, even to Leibniz before him). I’ve scribbled on this topic before, but one of the most pivotal implications of Kant’s often mind-scrambling work is that the most valuable knowledge is often “noumenal” to us, outside of the “phenomenal” perception availed by our individual cone of awareness. This is even true of our own individual knowledge and capabilities. Think about those instances when you’ve pulled off a feat you could never have imagined yourself doing, given that speech you thought was out of your league, set out to write a piece that seemed to write itself. (Trust me, you’ve pulled this off at some point even if you never explicitly patted yourself on the back from it.) There’s a reason for that: It’s simply not possible for our individual minds to fully grasp the extent of their own capabilities. In fact, staying in the kind of zone that makes us capable of pulling them off, often requires that we not be explicitly aware of them at all.
If our minds can never be fully cognizant of their own capacities, now consider the bar that’s set for comprehending those of a group of independently-acting, yet collaborating individuals. The potential is immense, and the structures we’ve assembled to tap this largely untapped wealth — from brainstorming sessions to sophisticated informatics systems — barely dip the bucket below the surface. One of the great challenges of our era is to develop better organizational systems to nurture and harness this added value. After all, our very societies may depend on them.
— J. Wes Ulm
