Rethinking Development Studies and World Poverty
“Truth that is ignored by friends is the deadliest weapon of the enemy."
Change Seems Inevitable
1. Society in the modern world changes. If those changes are in the direction that a researcher deems positive, that change is called development, or possibly intransitive development meaning it is happening by itself, (or by the collective agency of the players). If those ongoing changes are deteriorating social wellbeing, then the situation cries for transitive (or the interjection of proactive) development. If those interactions that are made on behalf of development are not delivering their promises, or if the side effects are more damaging than the positive goals that are able to be added to society, then Development Studies needs to be rethought. The possible motives of the developers should also be investigated, which I will look into below. I suggest that any effort put something into action should be judged only by the results on the ground for the parties involved, without much further justification.
2. If we find out that something is counterproductive on an individual level, we can change it. If I am driving in the wrong direction to reach my destination, I can turn around. If the effects of social institutions and social programs are found to be misguided, or hurting too many people, it is not possible to have an instant reversal. We can say that whatever solution is proposed, it will have to be designed to work in compatibility with the old faulty system. Institutions can be changed with this compatible, one step at a time methodology, along with a strongly projected rhetoric of what is working. The only alternative to one step at a time is revolution or crisis, which stops all function and then attempts to rebuild something new. The revolution brings life to a null point, or zero, and is always painful and unjust. With the emergency measures enacted from that null point, nothing creative will be employed.
Therefore we can acknowledge that whatever action is employed for betterment, the existing conditions (economic, political, social, hierarchical, power structures, competing interests), never align perfectly with that action. In most cases they block it or compromise it. We work within that imperfect condition, even as we try to improve it.
We can also propose that a dominant theory of development is that there is a technological solution for every problem. Even political issues are reduced to management techniques and the technologies of accountability and governance. This obfuscates that the technology might be the problem. A case in point that the arms race might be the solution for world security and creating world peace. Modern fertilisers, pesticide use and mono cropping are the solution to unfettered population growth. “Monsanto GMO seeds will save the world.” type of rhetoric. There are broad categories of problems with no technical solution. Their solution lies in relations between people and in the art of negotiation, striving to find if there is a such of thing as Win-Win.
History is Full of Action Done to Others
3. Perhaps the first transitive “development” was started in 1492, when Columbus discovered America. That started centuries of extraction and enslavement which extended into the colonies and empires of last century. Shadows of this motivation, in part, must remain in modern development; to make useful trading partners to supply raw materials and consume finished products. The cold war era injected a new political choice into the development fervour. Development was the contest for the new age empire building of either capitalist or communist regimes, most often at any human cost. Ideology was also part of the distant past, as Christian missionaries gathered souls through conversion. Much of this early ideology is suspect as a cleansing rhetoric, for those that financed the mission were definitely seeking monetary returns, at any cost. Even now it is said that development organisations are secular. But their western belief structures are still based in the western values of progress, and joining the modern age, fervent beliefs that defy debate and scrutiny. They include market friendly policies that suggest only one correct answer, that benefits who? “Development appears to be a belief and a series of practices which form a single whole in spite of the obvious contradictions between them.” It can be acknowledged that many practitioners of both then and now might have truly believed in their work, to save the world. Let their motivations be pure to that belief. Their actions still serve as a cover for those with more complex motivations.
It must be abundantly clear that today the dominant capitalist system of globalisation is as much the cause of suffering as the cure for suffering. One major cause of negative experience is the use of aid as a lever to pry open the liberal access to resources and capital markets. Aid that is offered in a deep crisis, (war, rebellion, debt crisis, economic collapse, cyclone or natural disaster) is always tied to structural adjustments proposed by the World Bank and IMF. Funds for relief are withheld until compliance is forthcoming in the blackmail of “shock therapy”. The bigger the crisis, the more that “disaster capitalism” has to gain.
With the opening and then the domination of capital markets, the west has the tool for instant punishment. If nations desist from playing the game of globalisation, all international investments flood out of the country overnight. Regionalism may be a defence against this monetary tool, or an attempt to play the game better. But it doesn’t create an egalitarian society or eliminate poverty and suffering. A case may be made that endemic suffering must be a major part of any system based on scarcity, which world capitalism is. Capitalism definitely creates winners and losers through intense competition.
Ecology as a Conundrum
4. The commons refers to that part of the planet that is not privately owned, and open for the collective enjoyment (of all the spices). When human populations were less dense there was no problem of the commons. All material was natural and biodegradable too. No rules were needed.
In civilised densities the problem of the commons is that the misuse of them (by overgrazing, deforestation, over fishing, extraction in mining and petroleum) is much more of benefit for the individual than the cost to him of the depletion of the resource. The cost is divided by the whole population, and even by the future populations.
Therefore, given total freedom, the commons will always be depleted as densities increase. Freedom in the commons guarantees ruin to all.
The same argument of extraction from the commons is valid for what you leave in the commons, water pollution, air pollution, soil erosion, desertification, and even up to the point of noise pollution and the advertising invasion. The rational man finds that his share of the cost of the wastes he discharges into the commons is much less than the cost of purifying his wastes before releasing them. Since this is true for everyone, we are locked into a system of "fouling our own nest," so long as we behave only as independent, rational, free-enterprises.
The defence against the losses of the commons are private property and the nation state. The nation state imposes regulation on the commons left within its territory, and controls the borders to disallow free entrance of non-citizens. Private property erects a fence. We abandon the commons in food gathering, enclosing farm land and restricting pastures and hunting and fishing areas. We are still struggling to close the commons to pollution by automobiles, factories, insecticide sprayers, fertilising runoff, and atomic energy installations.
One part of the erosion of the commons that is routinely ignored is exemplified by the United Nations Universal Declaration of Human Rights, which describes the family as the natural and fundamental unit of society. It follows that any choice and decision with regard to the size of the family must irrevocably rest with the family itself, and cannot be made by anyone else. This is the shadow of religious beliefs in the claimed to be secular institutions.
The argument here has been stated in the context of the population problem, but it applies equally well to any instance in which society appeals to an individual exploiting the commons, to restrain himself for the general good by means of his conscience.
It can be noted that the birth rates in developed countries are falling, sometimes below the replacement rate, which may balance the higher birth rates in the developing world. This creates a major shift in the prevailing cultures, and if free immigration is allowed or people push their way in, it will be the creation of a new culture and loss of the old ways of living. It is not even pluralism, but will be the eradication of the now dominant cultural base of the developed world.
Reasons for Development
5. Population growth requires development. We have heard much about top-down development or grass roots initiatives. On the level of the individual development project one might trouble about who decides what a positive future is. It is true that people can tend to confound the means with the purpose. The drive toward free markets is a case in point, and the belief that globalisation will free the world. Many see that globalisation engenders the exact opposite of freedom.
We could say that changes without agency are not appreciated by anyone, only faulted. So in the big picture, development might not be so complicated, in that:
- People would be allowed more agency to work effectively on their own problems.
- Structures that block that agency or make it less effective could be removed or lessened, but not increased.
- Injustice between parties that have unequal access to resources and the means of production can be brought more into line.
This requires laws and political process, and a justice system to apply those laws fairly. When there is unemployment in a poor country it means that there is something wrong with society itself and with the money system. Otherwise, local manpower would be occupied fixing local shortcomings while making use of local possibilities. It is acknowledged that some industrial raw materials and often including energy, must come from abroad. This requires a back and forth trade to manage the account of foreign currency in balance.
When poverty goes hand in hand with unemployment; it is not because of a development problem but because of an organisational problem. If there is insufficient circulation of money it’s because the rich are hoarding it waiting for a better opportunity, or it has left the region, or left the country seeking the same higher returns. Money is now free to desert a peripheral region for the city, and leave a nation state for other international opportunities. This forces an underdeveloped nation to play a globalisation game that it is not prepared for. They rarely can win much at that game.
What is all this capital used for? Is everybody building airpots, bridges and dams? Or are the greatest users all corrupt and lining their pockets? On the contrary, ordinary commerce needs operating capital. If I sell you something I may take cash or credit. If I sell to a small company I get paid in 30 days. If it is a community or school district I might be lucky to see money in 90 days. If I sell to my government I’ll get paid in 180 days, or longer. How will I continue production when the more I sell the less I have? I have to have a line of commercial credit. If my line dries up or my bank fails, I have to stop production and lay off my workers. Soon I will close my doors. I know what I am doing. My workers are capable and willing. My customers and suppliers want to deal with me. But everything is stopped. Maybe because Dunn and Bradstreet derated my country’s bonds.
Today's Global System
6. Capitalism, as we know it, divides resources creating the rich and the poor. Can everybody become the rich? No, that is just the covering narrative, but it is not the effect of system. In fact poverty might always be pushed down the line toward the underdeveloped, but finally it will settle on the last people to get on the bus. We see trends that this chronic poor class is expanding by the erosion of wellbeing at all but the top levels of this hierarchy. (Can there be another brand of capitalism? We’ll touch on that later.)
Remember that the word capitalism no longer means a political system of individual control of the means of production as opposed to the monolithic state run enterprises. This cold war thinking still dominates all of our definition structures. In this day and age capitalism refers to giant private empires (like hedge funds) that have no borders, and that can take down a national currency just for the profit of it, as easily as they can finance an effective international terrorist network. Murder and mayhem can be a part of the long used repertoire. I am not ascribing a monolithic face nor a conspiracy to this momentum, and individual motives may vary all over the map. But crisis capitalism gets what it wants, sooner or later in every region.
7. In the world, it’s usually the established powers which control the media and thus the national discourses. They are usually in the conservative position. They wish to change very little, or open the system even further to their will, so their rhetoric serves to block any innovation. They say that there is no alternative to THEIR prescriptions, which is another blockage they base on urgency that they often create. In fact, often the centre recites platitudes and standard or out of date knowledge, and only the periphery has a more realistic possibility for creativity. Sure the periphery can go wrong too, and needs to be checked and balanced.
All these (in)actions are fuelled with a narrative. In fact there is great competition to project the narrative for each competing program. Actually that is one overriding value of an independent academia.
Some say that narrative is indistinguishable from reality, so that in effect there are only competing narratives to sort out. It doesn’t matter if there is a true reality or just the narrative shadow, because we still have to do the sorting. A narrative is used to create actions, but it is also used to justify them and/or to cover-up actions as in “selective forgetting”. Also some actions are designed to divert attention from pressing problems by creating a worse problem, war or terrorism for example.
Terrorism has continually increased from “blowback” (a term coined and acknowledged by the American CIA), due to the monetary imperialism and projection of force employed by the super power. The resulting fear and instability it creates has given much power to the American rulers.
8. So we see that there are knowledge, or technical issues, (what to do), legal, financial, organisational and political conditions all which have an effect on the success or failure of development. An interdisciplinary approach has been suggested. Let’s take up some examples of six interrelated issues.
I. Land Reform is fundamental to water, food security and the ecology, because it is impossible to invest without land tenure.
II. Currency Sovereignty is fundamental to water, food, the ecology and good governance, because without a stable asset base investments cannot be made in any sector.
III Water Security and Sovereignty is fundamental to food, and ecology since without clean water we are all dead.
IV Food Security and Sovereignty is fundamental to ecology, currency sovereignty and good governance because famine creates so many problems that no amount of assets can solve them.
V Ecological Sovereignty is fundamental to water, food, good governance, and the future of our populace because without ecology water goes, soils erode and bad governance mortgages the lives of our children.
VI Good Governance is fundamental all of the above.
I propose that instead of looking at this as a complicated interrelated matrix that is going to take much time to unravel, we look for anything that could be common to all of these issues. I offer the hypothesis that it is money.
a) Money might be needed to buy land for reformed redistribution, or money which equals power is against giving up 10,000 acre summer home estates, see Brazil.
b) Stable money is what currency sovereignty is all about.
c) Water security takes long term investments in good ecology, non-toxic waste disposal procedures and controlling wasteful projects, like maybe golf courses for the elite in water scarce areas.
d) Food security takes continued investment to keep up with population growth.
e) Ecology is long term conservation and prohibition of short term despoliation, both investments requiring money.
f) Good governance is blocked by the fear of “where is all this money going to come from”? If we try to create justice and development through the redistribution of wealth, (tax and spend) we eventually create wars. If it is not war between the classes then it is an external war as a diversion tactic to breed fear and compliance.
Money as an Agreement
9. We sometimes think of money as wealth, but really the money system is just an agreement to keep track of flows. It is an information system based on trust. There can be myriad types of money, each with different characteristics. All of them can function side by side, each suited to its own purpose. A money system has consequences that rise to the surface in human values. A system where greed and exploitation are built in, ends up destroying itself. It promotes the negative side of human beings with all its consequences rather than the positive side. This is the damning feature of capitalism in this hypothesis. It is not the individual control of the means of production, but the chosen money system that is under it that programs world society not to work.
I am not an economist nor a money expert. So I don’t know all the good things that our interest bearing national fiat currencies have done. The world is now quite developed. But some growing problems in the system are becoming so painfully obvious.
✓Interest bearing means that with fierce competition, money goes only to those who need it the least.
✓Because it must seek the highest return, it must be mobile and focused only on the short term.
✓Because of seeking the highest return, disadvantaged societies that try to play this game are always trumped.
✓Interest bearing currency must be maintained in scarcity, so there can never be enough to go around to cover all the needs.
✓Many layers of interest are buried into every (even the simplest) product and it always filters down to, and accumulates with the poor.
✓Interest charges force debt-laden countries to rigorously compete with each other for markets. With mathematical certainty it can be predicted that as long as consumer demand in rich countries cannot keep up with the fast pace of developing, the competition for export will result in continuing lower prices. Thus the export strategy results in “fire sale prices” for natural resources in the Third World. Competition with each other and with the rich countries has begun only after massive social cutbacks, the wholesale sell-off of natural resources, and further lowering of wages.
✓✓ I believe that a permanent and growing POOR class of people is necessary to keep the current monetary system running.
More than One Currency
10. Most of us have heard of alternative trading schemes and we may think of them as a barter system, and that they would be very cumbersome to operate. But Complimentary Local Currency has many more possibilities than barter, and it has to be an answer to give capital and needed liquidity to communities of all types. Notice the name “complimentary”. To fix any kind of world social or economic system that is broken, you can’t just turn one system off and turn the alternative one on. They have to work successfully side by side for decades, so that those people with advantages in the old system will have time to adapt to the new.
Furthermore, a single type of currency (interrelated and interest bearing as all national currencies are), may be efficient at establishing markets and price points, but a single currency type has no resilience because sustainability requires diversity. There should be 100’s of currency systems employed by communities all over the world. Community does not mean only rural people, but even communities of leading industry and commerce already have trading schemes working in the $ Billions. There is no need to turn off interest bearing fiat currency. Just use it where it works best, perhaps in the centre and off shore, and use something else where it isn't working, in the periphery.
The Trueque movement in Argentina has, for example, over 6 million members and has facilitated billions of US dollars worth of commerce without any institutional support and no national currency, using only locally-printed interest-free coupons as a means of exchange. There are now 20 countries in the third world where complementary currency programs are active, and in thousands of communities. The oldest, the WIR in Switzerland is also trading $ Billions in industry.
Complex Natural Flow Networks
11. Diversity equals resiliency. Let’s look into the argument of how many complimentary currencies could be allowed. I have have found this discussion of complex flow networks. These arguments apply equally to ecology as found in the natural ecology systems, in sociology as found in sustainability of local communities, and even in financing and monitory flows, our type of currency that limits and conflicts the global economy. All of these systems are complex flow networks. All follow similar patterns or laws.
The elements are:
- Efficiency, like as in mono-cropping agriculture or single based currencies,
- Resiliency, like with forest diversity, habitat protection, and multiple choices for financing and trade.
- Resiliency is made of Diversity and Interconnectivity. The graph is something like this:
It is said that this graph is a simplification and you really need 4 dimensions to demonstrate it. This indicates that a single type of monetary system is very efficient in establishing price points within the market, but it is unstable. Too much diversity, or too many currencies would make for stagnation. Somewhere the proper mix can be found and if offered agency, local communities could make their own experiments.
The probability of reaching true sustainability in any field including ecology is ZERO, as long as the financial system that underpins that activity continues to be exclusively Fiat based Interest bearing Currencies. By their very nature they require an infinite growth spiral to keep paying the interest. If there is no growth then they require infinite aid and transference of wealth. Infinite growth is a guarantee of never reaching sustainability and of severe adjustment periods, crashes or total collapse. The last bank bail-out cost more than the inflation-adjusted total WW2 devastation and financial diversions.
Sustainable activities need to have a financial base in some other complimentary currency that bears no interest.
12. This prescription is not a license to print as much money as anyone wants. Who would accept it? Money is an information system based on trust. I need something done, but I only have a temporary job so I am short of cash. If you are also unemployed and can help me do what I need, I still don’t hire you because there is no money to pay you. When poverty goes hand in hand with unemployment in our community, such that local manpower cannot be occupied in fixing local shortcomings while making use of local possibilities, then we need to have the free agency to create our own trading system or local currency. How we create it will reflect in its characteristics, and will program those who use it in particular ways.
If the purpose of the currency is to promote local trade and to finance local projects and local infrastructure, then that currency should not bear interest. Interest bearing assets will be drawn away from the periphery toward the centre, where returns are higher. A currency with international convertibility will leave the system altogether, and come back only when we put our country's life style in the bargain basement.
When we design development projects in regions were there is a shortage of investment capital and local unemployment at the same time, that project should consider a component of complimentary currency to build up the economic flows around the project.
Complimentary means along side of money as we know it today. All regions also need a flow of goods from the outside of the region. In order to secure that flow, locally made goods or resources must flow in the opposite direction. Nobody is denying that interchange, which requires a common currency with the outside. Local trading with another instrument can free up the outside currency for what is needed from the outside.
Aid that doesn't Aid
13. Typical aid projects from the past (not only from the past, look at the US rebuilding of Iraq), had certain characteristics. With a typical local development program, funds flow from the donor to the local NGO, to the stores to buy the goods from non-local sources and to the labourers (local or not) who work on the project, and who then spend their money at non-locally owned businesses. In Iraq the locals were not even allowed to pick up a shovel. Eventually all of the contributed funds drain out of the community and the local NGO goes away, looking for a new program in order to receive further funding. The local money supply diminishes to its previous level, and the local economy is suffering again since there is no medium of exchange to facilitate the interchange of even locally-produced goods and services.
Instead of focusing on community assets and how they can be mobilised to solve local problems, communities focus on what they are lacking and describe their community in negative terms in order to attract the attention of external aid organisations. This leads to a “donor mentality” and a lack of social cooperation in defining community goals and carrying out the task of achieving them. It is the same dynamic with individuals in a national social welfare schemes. You can build a school but you can’t buy books, build a clinic but can’t pay for a nurse or medicine. Too many local buildings sit idle once they have been constructed and the funds spent on construction have been drained out of the community.
This scenario has got to be changed to make development into a reality on the ground.