Twins and the Next Generation

Dr. Denise R. Ames

“Twins,” I screeched. This was my first reaction to the news that my daughter, Mia, was pregnant with twins. She told me the news that she was pregnant a few months earlier but she wanted to actually see me in person to give me the twins’ news. Actually, it was my granddaughter, Lilly, who conveyed the numbers by shyly holding up her two little fingers to indicate that she was going to be a big sister to two babies, not just one.  

I am elated that I will have two more grandchildren but, to be honest, my first reaction was how is this going to impact my life. My daughter and son-in-law certainly had that reaction as well. Even my son, the new uncle, and daughter-in-law were in shock. I guess it is natural that our first reaction to such a life-changing announcement is a practical one, how are we going to care for these two new babies? How much work will it involve (everyone says a lot)? Especially given the fact that they live in a four-story (with basement) brownstone in Brooklyn that has limited space and a tiny backyard.

After the shock wore off a bit and I agreed to help out for a couple of months with the newborns and household, I began to think about the event more philosophically and in a larger picture than poor me, I will have to change a lot of diapers. These are two new children being added to a world that was far different than mine and my children’s world. Although they are entering as privileged children of well-educated parents who have a house, security, and the wherewithal to navigate a complex and ever-changing world; their future still seems uncertain to me and cause for concern.
questions-to-consider
Actually, the upcoming birth of my grandchildren coincides with the reasoning behind the impetus to make some changes at the Center for Global Awareness. My partner Nancy Harmon and I have decided that we as elders of society have a real contribution to make in helping to make a bright future for the next generation, my three grandchildren included. Of course, we are just a small non-profit trying to provide alternative educational resources to students and educators grades 9-university, but these small efforts collectively make a large movement.

As veteran educators, Nancy and I have thought our best efforts were sharing our educational experiences and expertise with students and educators, especially in the areas of cross-cultural awareness and infusing global perspectives. Yet, as the years have floated by, we feel less connected with the educational community as we did in the past. The standards, testing craze and STEM emphasis have left us more marginalized as enthusiasts of globally-focused curricula. Instead of packing up the shop though, we have decided to channel our energy and focus into a new initiative.

We feel that the elders need to step up to be real leaders in forging a bright, sustainable and peaceful future. As elders, we want to do our part. Therefore, we are developing an initiative called GRASP (Global Awareness Adult Study-Group Program). The mission of GRASP is to enhance adult learners’ global awareness by offering conversation materials that holistically present significant global topics using a unique four dimensional approach: see, know, evolve, and engage. By participating in this inspiring conversation program, adult learners will be able to see different perspectives and views, know more about significant global topics, evolve attitudes and shift behaviors, and engage more actively in helping to solve pressing global concerns through interacting more deeply with others.

Our purpose in developing GRASP is that we feel the world has become more polarized, confrontational, uncivilized, and uncompassionate. Many of us don’t listen well to each other and many righteously believe their way or the highway. We feel that informal study groups of significant global issues are a way to inspire thoughtful conversations, deep listening, changing attitudes and engagement in participants’ communities.

We are hard at work adapting some of our books, materials and website to an adult group study program format. Although we will continue to have our books and resources available to students and educators, our new program will consume most of our time.

We ask that you, our loyal blog followers, help spread the word for our fall launch. We hope that the program is successful, not for our own sake, but for the sake of my still developing twins and all those of the next generation.

 

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A Clear Choice in the American Election: Hillary Clinton and Donald Trump

This has certainly been an unusual election season! I am sure almost all Americans would agree. It has brought out every faction, interest group, and ideological stance in America. There have been the free traders, neoliberals, socialists, nationalists and globalists, isolationists and interventionists, evangelicals, small and big government supporters, those against the 1%, environmentalists, feminists, libertarians, Black Lives Matter, Blue Lives Matter and the list goes on. The old right and left divides seem to be shaken. Is this really a change election?

The call is for change, and the status quo is something to ridicule by many. But when asked for details beyond, “well, things have just got to change,” most are unsure – on the right and left – what that change entails. I do think this is a change election, but not the kind of change that most people hope for.

We are down to two major contenders: Hillary Clinton and Donald Trump, who have emerged victorious from bruising primary battles. Since there has been mountains written about this election, I wondered what I may contribute that has not already been repeatedly talked about. I came up with an idea after reading George Lakoff’s recent article, watching parts of the Republican National Convention, and watching the Democratic National Convention, especially a segment featuring Mothers Against Gun Violence. What has clearly emerged is that the two nominees have significant styles of leadership and governing. The big question is, “Which one do you think is best for the country?”

I see the two sides as 1.) community/mother as portrayed by Hillary Clinton and 2.) authoritarian/father, represented by Donald Trump. Two starkly different styles of leadership with very different results for America.

Donald Trump exemplifies every characteristic of a strong, authoritarian leader – bullying, caustic language, threatening charges, belittling opponents, and the list goes on. It is a style of leadership that we have seen before in strong-men from Joseph Stalin, Juan Peron, Benito Mussolini to Adolph Hitler; our history books are full of these leaders as they sweep to power and control those they rule. I think it is a reach to compare Trump to these historical dictators, but I think it is fair to point out the authoritarian streak that runs through Trump’s campaign. It is tempting for people who feel they have been marginalized by society to turn to a strong-man ruler who offers reassurances that he will solve all problems, and return the country to a place of security and respect as it was in an imaginary past. They see a direct link to their problems with solutions the strong-man promises, such as blame the immigrants, get rid of trade deals, or numerous other easy solutions to complex problems. Strongman rule has always resulted in disaster. You can’t solve complex problems with easy solutions, violence, and coercion.

Let’s spend some time on the style of leadership that Hillary Clinton shows flashes of governing by: communitarian/mother. In fact, her campaign slogan is “Stronger Together.” Many people see problems with direct causes and solutions; issues as primarily black and white with understandable solutions – inequality is caused by the concentration of wealth among the 1%, then tax the 1% more or trade deals have caused the loss of manufacturing jobs, then get rid of all trade deals. Instead, most problems are complex and part of a system in which multiple factors cause inequality and simple solutions will not solve them. It is easy to say A causes B and all we have to do is do is C, and all will be solved. It is more difficult to look at A,B,C,D, and E as causes with indefinite solutions.

I thought the Mothers Against Gun Violence provided an excellent model for a different way of solving problems. Adults who are sharing a common problem join together to address solving that problem by looking at and exploring all the factors that went into creating the problem. In this case, the proliferation of guns, police biases, social and family breakdown, violence in society, lack of community services, and gang warfare are some of the factors contributing to the death of their son or daughter. In giving their comments at the DNC, some mothers drew on their deep faith in God, others said it wasn’t all police that caused harm, and others spoke of how their dead child was giving voice through them to make a difference in the world. Hillary Clinton is closely aligned with this group of women and seems to embrace their particular approach to the problem. The DNC showcased a similar group supporting slain police. The two groups sure have a lot in common.

I am very drawn to this style of collective/community/mother leadership. If implemented at the national level it would be a revolution. Commentators chastise the Clinton campaign for not having big ideas, such as Trump’s building a wall or Sander’s campaign for free college education, but community/collective problem solving IS a big idea, it has never been done before on a large scale. It would be the political revolution that Sanders called for but at a grassroots level and not causing big headlines. The results of community-based actions are promising and hopefully a national champion supporting this effort, such as the president, would help it grow.

We often want quick and simple answers to our complex problems, but to have long-lasting solutions often takes a long time and more than federal legislation. Community based solutions bypass the gridlock in the government. To me breaking the final glass ceiling that Hillary Clinton hopes to do in November, will not only be celebrating the first woman to govern in the White House but also breaking the glass ceiling of the authoritarian/hierarchical type of leadership that is paralyzing our nation and creating havoc around the world. A community-based leadership style and collective solutions would indeed be the BIG idea or the political revolution that many Americans so desperately crave.

questions-to-consider

  1. What is community-based organizing?
  2. Do you think it would work?
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The Brexit Vote in a Historical Context: Part II 1945-1970s

A second part discussion of the historical context of Brexit.

BrexitThe recent Brexit vote has certainly created lots of uneasiness among not only people in the United Kingdom but around the world. The event is complex and the repercussions are multifaceted. It is hard to talk about the complexity of it without getting bogged down in emotional tirades or mind-numbing detail.

What appears to be happening is that a major shift in the current economic/political/social structures seems to be underway. Since the 1980s, the twin forces of neoliberalism and economic globalization have expanded and now hold sway in the West. Neoliberalism is the modern politico-economic theory favoring free trade, privatization, minimal government intervention in business, reduced public expenditure on social services, balanced budgets, free movement of labor, and others. Economic globalization refers to the increasing integration and expansion of the capitalist (neoliberalism and state) economy around the world. Trade, investment, business, capital, financial flows, production, management, markets, movement of labor (although somewhat restricted), information, competition, and technology are carried out across local and national boundaries on a world stage, subsuming many national and local economies into one integrated economic system. There is also a growing concentration of wealth and influence of multi-national corporations, huge financial institutions, and state-run enterprises.

These twin forces have shifted the economy to favor those at the top of the economic ladder while the working and middle classes have either experienced stagnation or declining wages. For years, the backers of neoliberalism and economic globalization have been able to hold off complaints and protests about the inequality generated by these two forces, but it appears those on the “losing” end have made their voices heard. In the U.S., Donald Trump and Bernie Sanders have loudly voiced their displeasure with the status quo and the Brexit vote also showed that a majority of the UK wanted to get out of the European Union and forge their own path.

The problem with any type of protests and calls for change, as this seems to be, is what kind of system will replace the current one. Of course, there seems to be wide disagreement on what that replacement should look like. Here lies the problem. Those on the right, represented by Donald Trump in the U.S. call for protectionist policies, cuts in immigration, closing borders, and heightened nationalism, while those on the left, represented by Bernie Sanders, call for more government programs, such as free college tuition, an increased minimum wage, spending for infrastructure, and higher tax rates on the wealthy. Although these programs may sound good to their followers, the repercussions of high tax rates or protectionist trade policies are unclear. Hillary Clinton, on the other hand, represents the status quo, liberal democratic policies with some tweaks.

To give some historical light to this debate I would like to insert an edited section from my book: The Global Economy: Connecting the Roots of a Holistic System that explains the post-war economic order and the chaos of the 1970s, in which various forces vied for economic supremacy. Perhaps now is such a time again, as neoliberalism is being battered from various sides and may reassert itself or fall into the dustbin of history as it did in the 1930s.

The Post World War II Economy (1945-the 1970s)

Bretton Woods Resort

Bretton Woods Resort

In the spirit of wanting to avoid another Great Depression and world war, the major world economies met to discuss the post-war economic order in 1944 at the New Hampshire resort of Bretton Woods. Over the next three weeks, the delegates made plans for a postwar economic order, simply called Bretton Woods. The delegates forged three institutions to stabilize the post-war order: the International Monetary Fund (IMF), General Agreement on Tariffs and Trade (GATT) and the World Bank. The delegates settled upon a modified dollar/gold standard fixed at $35 to an ounce of gold. Many felt the dollar was a good monetary anchor for international trade, finance, and investment. The compromise brought stability to the world economy for 25 years. It also meant that labor was a powerful force in shaping policies that benefited them. The post-war years turned out to be a golden age for nations across the globe. Prosperity increased for many, and economic progress appeared to be limitless. It was generally a time of optimism and confidence in the future.

  1. The Golden Age of Capitalism

In the classical era of global capitalism, the elite generally had little concern for social or moral issues but said the market was a solution to all problems. After the war an ethical shift occurred. The West’s policies aimed to create more equal social policies in a new social democratic state. This ethic continued until the rise of neoliberalism in the 1980s. Managed capitalism reigned in the 1950s and 1960s. Some state-owned enterprises, usually large public services, coexisted with small businesses and free markets. Government was involved in the economy, along with a broad social safety net and powerful labor movements. A blend of active markets, strong governments, big business, and organized labor resulted in rapid rates of economic growth and stability. All prospered in this arrangement, but labor made the greatest strides. The golden age was a time of order and optimism.

  1. The Golden Age of Communism and Socialism

These nations made the case that central planning needed to replace global and national markets. They thought that the needs of poor people and poor countries for equality and a better standard of living could not be met by integration with world markets but adopting a command economy. From 1948-1973, the centrally-planned economies, such as the Soviet Union and Cuba, did quite well, and the results impressed many unhappy with the inequities of capitalism. Illiteracy dropped, and education improved. Medical care was free. Infant mortality dropped, often below that of wealthier countries. Communists and socialists ruled one-third of the planet and had millions of devout followers.

  1. The Golden Age for the Middle and Periphery Countries
ISI policies, built cars in Argentina

ISI policies built cars in Argentina

The middle and periphery nations took two economic approaches. Most countries followed inward economic development of Import Substitution Industrialization (ISI). Others turned outward and promoted exports, such as in South Korea. The decision to adopt one or the other approach differed among countries.

The ISI countries largely closed themselves to foreign trade and industrialized. They met with general success. The newly independent colonies, likewise, kept out foreign goods and often foreign capital to build up their independent national economies. ISI governments’ aim was to make domestic manufacturing more profitable, and they provided tax breaks to investors in the favored industries. These policies resulted in industrial development, but at the expense of the primary exporting sectors, such as farming and mining. Farmers and miners paid more for tariff-protected manufactured goods, but had to sell their own products without government assistance at world market prices, which were usually low. Taxes on the primary exporting sector, in effect, subsidized favored national industries. ISI policies shifted resources and people from farming and mining to manufacturing, from the countryside to the cities, in an effort to help industry flourish.

export oriented industrialization

Export oriented industrialization

In the mid-1960s four East Asian countries, the so-called “Asian tigers” – South Korea, Taiwan, Singapore, and Hong Kong – tried a different form of ISI: they pushed exporting their manufactured goods to core countries. The East Asians turned to export-oriented industrialization (EOI) in part because they had few natural resources to export, and the only way to earn foreign currency was to export manufactured goods. They specialized in exporting labor-intensive goods, using their hard-working and large pool of cheap labor as their comparative advantage. The government gave help to export industries and created plenty of jobs, and low wages kept exports cheap. Their exchange rates were also undervalued to make their exports more competitive on the world market, which also resulted in depressing consumers’ purchasing power.

For capitalists, communists/socialists, ISI and EOI nations, the early 1970s was the high-water mark of the postwar world economy. Almost all nations, including former colonies, grew rapidly and consistently. Prosperity reigned. But things were about to change.

The Crisis of the 1970s

The 1970s, like the 1930s, proved to be an important era in economic history. Looking at all the following factors as a holistic system we can see how all contributed to the 1970s crisis, it is hard to pin-point the major one. The United States’ position as the superpower of the capitalist world was suddenly hit from all sides, and the Bretton Woods system lay in disorder. Would the ruling powers be able to patch together the old Bretton Woods order again? Or would the old order be overturned and a different one established? The answer in the turbulent 1970s was not clear.

gold

Gold

  1. The Dollar and Gold.  Since 1944, the U.S. had been committed to the post-war international economic order –Bretton Woods. It was about to be undone. After 25 years of stability, its collapse unleashed a host of problems. Confidence in the dollar declined. Holders of dollars wanted to exchange them for gold, which led to a run on U.S. gold reserves. The dollar’s fixed rate of $1= 1/35oz. of gold needed to be undone and the dollar devalued. In August 1971, the U.S. decided that the dollar was not exchangeable with gold. The dollar dropped compared to other currencies by about 10 percent and devalued again by 10 percent in 1973.
  1. International Financial Flows. When the dollar/gold standard was undone, currencies were allowed to float; a nation’s currency value varies according to the foreign exchange market. As a result, the growth of currency speculation skyrocketed. International finance returned, along with economic instability. It had been inactive since the Depression years, with governments managing their own domestic monetary policies and capital controls to prevent currency speculation. Because of the collapse of the Bretton Woods order, speculators could now move money around the world in search of profits.
  1. Overcapacity. By the mid-1970s, the key problem for core economies was overcapacity or overproduction of goods. Capitalist economies have a tendency to build up more capacity to produce goods and services relative to consumption. Overcapacity was found in the U.S. and Europe. Also, newly industrialized countries like Brazil and South Korea added to overproduction. Yet, incomes limited the demand for the overproduced goods. Thus, overcapacity resulted in a steady decline in profitability for business.
  1. Stagflation. Inflation picked up in the U.S. in the late 1960s, going from about 3 percent in 1966 to nearly 6 percent in 1971. These rates were considered high at the time. Inflation spiked to over 10 percent in 1974 and again from 1979 to 1981. Adding to the economic misery, the unemployment rate topped 8 percent in 1975 and reached nearly 10 percent in 1982. Growth in the core countries slowed. Governments tried to stimulate their economies by increasing spending, but then inflation raged. The economy seemed trapped in the new, cleverly-termed nightmare of “stagflation:” a combination of low economic growth and high unemployment (stagnation) with high rates of inflation. Policymakers seesawed back and forth between trying to solve high inflation and then trying to solve high employment. Nothing seemed to work.
  1. Low Labor Productivity. The combined effects of rising wages and declining productivity growth resulted in large increases in labor costs per unit of output. While unit labor costs were constant in the first half of the 1960s, they grew at nearly 2 percent per year from 1966 to 1967, and at over 6 percent per year from 1968 to 1969. These rising labor costs, in turn, ate into business profits and added to inflation.
  1. Oil. The increase in the price of oil contributed to economic uncertainty and inflation. To some, the world price of oil had lagged behind inflation for decades, and was merely “catching up” in the 1970s. The major oil producing nations were tired of supplying cheap oil to the core nations and formed the Organization of Oil Producing Countries (OPEC) that regulated the price and production of oil. Since oil supplied half to three-fourths of the industrial world’s energy, oil importing countries were at OPEC’s mercy.
  1. Gas station lines, 1979

    Gas station lines, 1979

    Decline of U.S. International Authority. The U.S. continued to be a major superpower in the world through the 1970s but it no longer enjoyed the dominance it had once experienced. The recovery of manufacturing in Western Europe and Japan meant more competition for U.S. firms in industries like steel and automobiles. Also, U.S. decline in the periphery undermined U.S. companies’ easy access to cheap materials and energy resources.

  1. Womens Liberation March, 1970

    Women’s Liberation, March 1970

    Social Movements in the United States. Mass social movements of the 1960s and 1970s – civil rights, women’s liberation, anti-war, gay rights, anti-nuclear, consumer rights, Native American rights and the environment – contributed to the crisis. Increased pressure for social reform gave rise to greater government regulation of private business. Before, government agencies had just regulated specific industries, but new social regulations included environment, consumer-protection, occupational safety and health, and anti-discrimination laws.

  1. Debt and Poverty in the Middle and Periphery Nations. With the return of international finance, middle and periphery nations could borrow money from private international bankers. And borrow money they did. Tens of billions of dollars a year flowed from banks and bondholders in the core nations to the borrowing middle and periphery nations. Inflation exploded. Their debts and interest payments soared.

ISI national economies were breaking under a number of problems. ISI nations favored industry over agriculture, which worsened rural poverty in countries that were heavily rural. Farmers migrated to the cities to look for jobs in the new industries. But ISI growth was very capital-intensive, and industrialists did not need much labor. Poverty awaited farmers who flooded into the cities seeking non-existent factory jobs. ISI countries often ended up as dual economies. Skilled workers earning fairly high wages worked in industries, government policy froze out a majority of struggling farmers and urban poor from the modern economy.

The socialist economies primarily relied on the export of natural resources – petroleum, gold, timber, minerals – but these would not be enough to pay for necessary imports. Although the socialist countries were not in crisis in the 1970s, signs warned of problems ahead. Socialist reform programs had stalled, and the central planners struggled with poor living standards, lagging technology, and declining growth rates. The 1970s signaled that the glory days of socialism would soon be over.

The Uncertainty of the 1970s

The postwar order (1948-1973) had achieved its goals. The capitalist countries got economic integration, coupled with a welfare state and a well-managed economy. Some of the middle and periphery countries built their industrial base, along with protection from foreign influence. The socialist countries got rapid industrial and economic growth and a somewhat equal distribution of income. But by the late 1970s, these goals had become more difficult for all three groups. The way forward was not clear.

The Shift to the Right

The late 1970s and early 1980s looked like the 1930s. Different interest groups fought each other over how to restructure national and global economies. There were the nationalists and globalists, free marketers and managed capitalism supporters; there were leftists who wanted socialism and rightists who wanted less government. Compromise appeared impossible. When the dust settled, it was the political right, the free-market supporters, who had gathered political and popular support. It wasn’t an over-night victory, the right had been working on its agenda throughout the 1970s and even before, but its victory was decisive and shaped the economic and political landscape to the present day.

The crisis of the 1970s marked the end of the “Golden Age” and the rise of neoliberal capitalism. Neoliberals wanted an end to social welfare programs, deregulation, and the dismantling of labor unions. It blamed government regulation, taxation, and social programs for what it thought to be the economic and moral decay of society. It tapped into and fueled a backlash against the civil rights and women’s movements. It also drew on the power of patriotism, since many Americans thought that their country was in decline. The right promised to restore the country to its rightful place of global supremacy.

Shift to the Right, Ronald Reagan

Shift to the Right, Ronald Reagan

Even though many Americans supported the turn to the right, it was largely a movement of the powerful. Some of the very largest corporations organized a campaign to make sure that they settled the crisis in a way that favored them. First, they set up “think tanks” which outlined a conservative economic agenda. Second, they stepped up their lobbying efforts of friendly government officials and put money into supportive business organizations, such as the U.S. Chamber of Commerce. Third, they financed conservative candidates for public office. These efforts in the 1970s played a big role in bringing about the “turn to the right.” The conservatives gradually displaced the managed, social democratic form of capitalism followed for over four decades in the U.S. with an agenda similar to the classical era. It would fall to Republican Ronald Reagan, elected president in a decisive showing in November 1980, to forge a new economic agenda in the U.S.

The crisis of the 1970s had ended with the emergence of a neoliberal version of capitalism. It was a well-planned change to a system that benefited specific groups of people. The golden era of post-war capitalism in the U.S. was a time when there was a balancing act among government, labor, the middle class, and business interests. Although not perfect, all groups generally profited from the cooperation. Yet, many business groups felt they were limited in their ability to make more profits. Big business interest group organized and funded an agenda to take the lead in shaping the future economic system. For them, their hard work and investments paid off.

As the world’s leading economy, the U.S. had a more significant role in shaping the global economy than other countries. Three dimensions to the global economy took shape out of the disorder of the 1970s – neoliberalism, economic globalization, and financialization.

Today, Europe clings to the social democratic policies since the 1930s with a generous social safety net, but it also competes with countries practicing neoliberalism, such as the U.S., that has seen a fraying of the social safety net. State capitalism, a carryover from communist command economies, continues in China, Russia, Saudi Arabia, and elsewhere. Perhaps the Brexit vote will mean a move to more nationalistic, protectionist economies, reminiscent of the ISI economies in the 1950s and 1960s. Or perhaps the supporters of neoliberalism will once again assert that their principles govern the world economy.

questions-to-consider

  1. Why did different economic models exist during the post-war years?
  2. Why was there a return to the classical era of laissez-faire capitalism (neoliberalism) in the 1970s?

 

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The Brexit Vote in a Historical Context

01 BrexitThe recent Brexit vote has certainly created lots of uneasiness among not only people in the United Kingdom, but around the world. The event is complex and the repercussions are multifaceted. It is hard to talk about the complexity of it without getting bogged down in emotional tirades or mind-numbing detail.

What appears to be happening is that a major shift in the current economic/political/social structures seems to be underway. Since the 1980s, the twin forces of neoliberalism and economic globalization have expanded, and now hold sway in the West. Neoliberalism is the modern politico-economic theory favoring free trade, privatization, minimal government intervention in business, reduced public expenditure on social services, balanced budgets, free movement of labor, and others. Economic globalization refers to the increasing integration and expansion of the capitalist (neoliberalism and state) economy around the world. Trade, investment, business, capital, financial flows, production, management, markets, movement of labor (although somewhat restricted), information, competition, and technology are carried out across local and national boundaries on a world stage, subsuming many national and local economies into one integrated economic system. There is also a growing concentration of wealth and influence of multi-national corporations, huge financial institutions, and state-run enterprises.

These twin forces have shifted the economy to favor those at the top of the economic ladder, while the working and middle classes have either experienced stagnation or declining wages. For years, the backers of neoliberalism and economic globalization have been able to hold off complaints and protests about the inequality generated by these two forces, but it appears those on the “losing” end have made their voices heard. In the U.S., Donald Trump and Bernie Sanders have loudly voiced their displeasure with the status quo and the Brexit vote showed that a majority of the UK wanted to get out of the European Union and forge their own path.

The problem with any type of protests and calls for change, as this seems to be, is what kind of system will replace the current one. Of course, there seems to be wide disagreement on what that replacement should look like. Here lies the problem. Those on the right, represented by Donald Trump in the U.S. call for protectionist policies, cuts in immigration, closing borders, and heightened nationalism, while those on the left, represented by Bernie Sanders, call for more government programs, such as free college tuition, an increased minimum wage, spending for infrastructure, and higher tax rates on the wealthy. Although these programs may sound good to their followers, the repercussions of high tax rates or protectionist trade policies are unclear. Hillary Clinton, on the other hand, represents the status quo, liberal democratic policies with some tweaks.

To give some historical light to this debate I would like to insert an edited section from my book: The Global Economy: Connecting the Roots of a Holistic System that explains similar economic upheavals that took place in the beginning of the 20th century. It is worth reading because of the eerily similar situation as today.

The First Golden Era of Global Capitalism (1896-1914)

The years from 1896 to 1914 were the first high point of global economic integration. The world had never seen such an open market for goods, capital, and labor. It would be another 100 years before the world returned to that level of integration. For those who benefited from this early economic globalization, it worked beautifully. Those who were able to capture the comparative advantage of their country benefited. Labor and capital moved around the world from where they produced less to where they produced more. Profits were astonishing.

03 Oklahoma wheat farmer

Oklahoma wheat farmer

But not everyone benefited from global economic integration. On the destructive side, small farmers in Europe were driven out of business because they were unable to compete with large farmers in the U.S. and Argentina. A few of those on the losing side of specialization and economic integration included European grain farmers, Chinese artisans, and Indian textile weavers. Opening markets, paying back debts, and following the gold standard all involved sacrifices, which the poor and weak paid for.

04 Ford assembly line 1913

Ford assembly line 1913

In 1900, the homeland of the Industrial Revolution was being left behind. Industrial leadership was slipping away from the British to the new industrial titans—Germany, the U.S., and Japan. In 1870, Britain, Belgium, and France together produced nearly half of the world’s industrial output, but by 1913, they were producing barely one-fifth. German industrial output was more than Britain’s, and America’s was more than double Britain’s. The U.S. introduced methods of mass production, while the Germans made advances in electrical engineering and chemicals. A shift in core areas was underway.

The British had held their core status since the 1700s. Their golden age stretched from 1846 into the 1870s, during which international trade jumped fivefold. After 1900, the U.S. and Germany made exports from Britain more expensive for consumers by adding tariffs. The decline in British exports affected the wages of its workers, which dropped by about 10 percent. By 1914, women in Britain constituted 41 percent of the workforce because families needed two incomes to make ends meet. The U.S. would experience this trend in the late 1970s.

As the British continued their decline, more wealth went to the top 1 percent. Their share of wealth peaked in 1911-1913 at 69 percent. The lifestyle of the upper class was a whirl of showy consumption, as the elite purchased huge yachts, attended pheasant shoots, and vacationed in luxury hotels. Similar to the situation in the U.S. today, some British wanted to revive manufacturing, but instead finance and the concentration of wealth continued. With the collapse of British world economic leadership, the share of wealth in the hands of the top 1 percent declined from 69 percent in 1914 to 33 percent in 1960.

The Early Twentieth Century Economy (1914-1945)

Before 1914 the benefits of international economic growth were available only to some of the people some of the time. But almost everything from 1914 to 1945 was bad for almost all the people all the time. During this time the world staggered around a vicious circle in which global economic collapse caused national crises, and national hardships drove domestic groups to extremes.

At the end of World War I in 1918, the negotiations between the war’s victors and the defeated took a nasty turn. The victors demanded that Germany admit guilt for causing the war and pay them compensation. The victors refused to renegotiate the large war debts, eventually contributing to the collapse of the fragile German democracy and the rise of the extreme Nazi Party and Adolph Hitler.

05 Czar Nicolas II among troops WWI

Czar Nicolas II among troops WWI

One notable event during World War I was the decisive German defeat of the Russian army. The weak Russian monarchy gave way to a Communist uprising in 1917. Those favoring the monarchy and victorious communist’s supporters battled each other in a brutal civil war. The Soviet Union formed in 1922. They championed a command economy, which continued until its collapse in 1991. After the revolution, the country industrialized and collectivized agriculture. The heavy boots of the communist elites stamped out the infant free market.

06 wheelbarrow of marks

wheelbarrow of marks

With the end of World War I, an uneasy peace settled upon Europe, and economic turmoil prevailed. In an attempt to control the unrest, governments printed more money, causing inflation to spiral out of control. It was the worst in Germany where it was common to see people pushing wheelbarrows full of cash just to buy a loaf of bread. This was inflation at its worst, wiping out the life savings of millions of people. Despite hardships, by 1924 most of Europe had recovered from inflation and the war. But to the German middle class, who lost most of their savings because of inflation, the chaos of the early 1920s showed that the liberal democratic elites were unfit to rule. In light of this backdrop, Hitler’s anti-democratic message was appealing to them.

The European middle class was squeezed again as large corporations came to dominate industry, and farming was modernized. Almost every European extreme right wing movement found its main base of support among small business people and small farmers. Fascism had an anti-corporate, anti-labor, and anti-foreign message. Farmers and businessmen in some nations where there were many Jewish-owned businesses or merchants identified with the European extreme right wing anti-Semitic views, since they saw Jewish competitors, creditors, or middlemen as part of the problem.

07 Ford Assembly line 1928

Ford Assembly line 1928

The U.S. was the world’s largest economy in the 1920s and continued its protectionist trade policy. One of the high profile industries was automobiles. The assembly line installed in Henry Ford’s Highland Park, Michigan plant in 1913, reduced the time necessary to make a Model T chassis from over 12 hours to 90 minutes. Labor’s strength grew as industry shifted to large corporations and factories, such as Ford Motors. The new corporations were friendlier to unions than older, smaller firms. Labor was a higher part of production costs in older, labor-intensive industries than in the newer, larger factories. Also, tariff policies meant that prices would not face competition from imports; thus, labor costs were passed on to consumers in the form of higher prices. The growth of unions and large corporations went hand in hand.

On Black Tuesday, October 29, 1929, the U.S. stock market collapsed. It was a clear signal that the Great Depression was at hand. The economic collapse of 1929-1934 was severe. The industrialized world crumbled for over five years as unemployment went above 25 percent almost everywhere. In the U.S. farm prices fell by 52 percent between 1928 and 1933. In response, U.S. conservatives in Congress raised tariffs with the passage of the Smoot-Hawley Tariff Act in 1930, and within a few months other countries also began raising tariffs. The high tariffs put a further damper on international trade.

Deflation, a decline in prices and wages, was a major problem in the Great Depression. A country’s commitment to the gold standard blocked attempts to combat deflation. Gold ruled. Countries on gold had to let prices take their course, for national prices were a local expression of world prices, and world prices were low – very low. Lending nearly stopped as credit markets tightened. The British government took its currency off gold in 1931. President Franklin Roosevelt took the dollar off the gold standard when he came into office in 1933. As a result, the dollar declined in value, causing the prices of agricultural products and other primary commodities to soar. With more money in circulation, prices rose continually, and deflation eased.

08 great-depression, U.S.

Great Depression, U.S.

The Depression left its mark everywhere, and it pointed away from neoliberal capitalism and toward government involvement in the economy. The Western countries had become more democratic since the classical era, and labor, the middle class, farmers, and the poor, who bore the burden of earlier policies to stabilize the economy, were no longer willing to make that sacrifice.

The Rise of Economic Nationalism

Hitler breaking ground for highway construction project, 1933

Hitler breaking ground for highway construction project, 1933

While Western democracies sought to rebuild global economic integration in the face of economic collapse, the fascists and much of the world looked to protect themselves from it through a policy of economic self-sufficiency. The democracies worked with organized labor, while the fascists destroyed their labor movements and ties to socialism. Germany cast off global capitalism after 1929, and instead, the government built public works projects. Its plans needed a strong government, and the Nazis and their supporters gladly turned away from the weak governments of classical, capitalism.

Many middle status, semi-industrial, debtor countries moved along an economic path that was often at odds with that of the core countries. They, like the fascists, followed a new economic nationalism and rejected the gold standard, levied high protective tariffs, and controlled foreign investment. They built urban industries that produced goods for their domestic market, although not for export. Their previous areas of specialization, such as agriculture, funded sectors of the economy that the market had not developed because of foreign competition, especially national industry. For example, Argentina taxed its well-established agricultural sector to fund its infant national industrial growth policy.

After 1928 in the Soviet Union, Joseph Stalin and his communist supporters consolidated their power. They began pushing the country toward rapid industrialization, with resources squeezed out of the agricultural and consumer sectors. The Soviet regime forced peasant farmers into government controlled collective farms. The small-to medium-sized farmers resisted forced collectivization. Although Soviet industrialization was a success in many ways, the government’s supporters – urban workers and Communist Party members – received most of the benefits, while farmers suffered.

10 Argentina airplane plant

Argentina airplane plant

Africa, Asia, and Latin America were economically cast aside from the global economy from about 1929 to 1953. In this period, the middle nations broke from their open economy pasts to a model based on import substitution industrialization (ISI). Under ISI a country manufactures its own products and reduces its dependency on foreign trade. Many Latin American countries adopted ISI from the 1930s until the 1980s, and some Asian and African countries followed from the 1950s until the 1980s. Cities and industries grew in areas of Latin America and the Middle East. For example, Egyptians, who had exported raw cotton to Britain for decades, used their own cotton to make clothing textiles, and soon a busy, tariff-protected industry sprouted up.

Building a Social Democracy

In the middle 1930s, the Western democracies began to shift the elite-favoring policies of laissez-faire capitalism to social democracy. It was a clear alternative to fascism and communism, which were firmly in place by the late 1930s. A social democracy is where a country has some government management of the economy, safety net provisions, such as social insurance and social security, and labor rights. Every industrial nation developed similar social plans. Even the U.S., a country that boasted of rugged individualism as its core principle, turned to a limited social democracy. These benefits freed people from the worries of a modern, capitalist society and cushioned the cruel booms and busts of the market place.

11 TVA public works, New Deal, U.S.

TVA public works, New Deal, U.S.

Corporations in the social democracies of the 1930s largely backed the democratic reforms. They quickly realized that their contributions to unemployment, pension programs, and social insurance did not affect their competitive advantages, since other Western nations were doing the same, and there was limited global competition at this point. Especially during the 1930s, many corporate leaders came to support, or at least not to oppose, social reform.

The classical economic order (like neoliberalism today), based on the gold standard and limited government, was swept away on all fronts during the 1930s. The British economist John Maynard Keynes helped shape the shift from laissez-faire capitalism to social democracy and managed capitalism. He thought governments should take action in the economy to soften the boom and bust cycles of capitalism. Keynesian policies were important in the Western democracies, and these countries adopted them from the 1930s to the 1970s.

The economic systems of the world – social democratic capitalism, communism, and fascist self-sufficiency – clashed on the global battlefield of World War II (1939-1945). The world had never seen a war of such global scope and horror. At the end, the defeated fascist economies lay in ruins, while the Allied victors promoted their favored economic forms: communism and social democratic (managed) capitalism. The world roughly divided into these two camps.

Today, Europe clings to the social democratic policies of the 1930s with a generous social safety net, but it also competes with countries practicing neoliberalism, such as the U.S., that has seen a fraying of the social safety net. State capitalism, a carryover from communist command economies, continues in China, Russia, Saudi Arabia, and elsewhere. Perhaps the Brexit vote will mean a move to more nationalistic, protectionist economies, reminiscent of the ISI economies in the 1950s and 1960s.

I favor an economy that is more local, self-sufficient (at least in food) and run by small business people. Global trade can continue but with country to country trade agreements that take into account labor and environmental protections. With government policies that favor small instead of big, perhaps this can be a model for the future.

questions-to-consider

  1. Why didn’t laissez-faire policies work to end the Depression?
  2. What were the alternatives to laissez-faire capitalism in the 1930s? Why did they emerge?

 

 

 

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Rigoberta Menchu: Becoming an Indigenous Activist (Part II)

Excerpted from Dr. Ames’ recently released book Human Rights: Towards a Global Values System.

“We Indians never do anything which goes against the laws of our ancestors.”
Rigoberta Menchu

Rigoberta Menchu

Rigoberta Menchu

Rigoberta Menchu’s harrowing story spans her childhood growing up poor in a poor country as an indigenous person with a culture different from modern culture and as a global activist fighting for the rights of indigenous peoples. In a sense, she speaks for all indigenous peoples of the American continent. The cultural discrimination she has suffered is something that all the continent’s indigenous peoples have been experiencing since the Spanish conquest. Her voice allows indigenous peoples to speak. She is a witness who has survived the violence aimed at destroying her family, community and culture, and she is stubbornly determined to break the silence and to confront the systematic extermination of her people.

Rigoberta saw a stark difference between indigenous and modern education. To indigenous people, nature was their teacher. Her father was very suspicious of modern schools and said that once people learned to read and write, they weren’t any use to the community anymore. They moved away and were indifferent toward their community. Rigoberta wanted to go to school to learn to read and write. Her father said she would have to learn on her own since he had no money for her education. He thought she was trying to leave the community and was concerned that she would forget her heritage. She still insisted she wanted to learn. Despite her father’s misgivings, she sporadically attended a Catholic school.

Young Mothers in Guatemala

Young Mothers in Guatemala

As she was becoming a woman, her parents told her that she had to be a mother. They also warned her not to not wait too long before getting married, although the community did not shun childless couples. Unlike the ladinos, her community did not reject the huecos, what they called homosexuals. They saw all different ways of life as part of nature. They also said that whatever her ambitions were, she had no way of achieving them. That’s just how life was.

When Rigoberta turned 14 many of the villagers went as a group to work on the plantations. She and a friend, Maria, were assigned to pick cotton that was being sprayed with chemicals. Maria died from the poisoning and was buried on the plantation. Rigoberta was mad with grief. She hated the people who sprayed the crops, holding them responsible. Rigoberta decided, against her parents’ warnings, to take a job as a maid in the capital city. The maid’s job was a disaster, as she described it, she was treated worse than the owner’s dog. She worked for a couple months then left, vowing never again to take such an insulting position. Her job as a maid left her with the impression that the rich were un-Christian, lazy and mean.

Spanish School

Spanish School

After she left the maid’s job she was distressed to find that her father was in prison. Big landowners had come to their village to take away the land that her father and other villagers had cultivated for over 22 years. The peasant farmers, like her father, were at a disadvantage because they did not speak Spanish and did not understand their rights. The big landowners had started to threaten her father when he began getting involved with the unions, which were helping the peasants keep their cultivated land. The most upsetting thing for her was not being able to communicate; therefore, she vowed to learn Spanish. After a year and a great deal of trouble, her father was finally released from prison. Everyone in the community helped to get her father out of prison by contributing to the legal fees needed for his case.

Catholic Church in Guatemala

Catholic Church in Guatemala

The landowners were furious that her father had been released. Shortly after his release, the landowner’s guards kidnapped him near the village. Her brother immediately mobilized the whole village to get him back. The villagers cut off the kidnappers’ escape path, and they used their weapons—machetes, sticks, hoes, and stones—to fight the kidnappers. They found her father, who the kidnappers had abandoned, beaten and tortured but was still alive. The villagers carried him to the nearest health center, but the landowner’s guards had gotten there first and paid the doctors not to treat him. Her mother had to call an ambulance to take him to a hospital in the next city. He arrived at the hospital half dead. Her father remained in the hospital, and her mother had to work in the city to pay for his care. While still in the hospital, they received another threat that said her father would be kidnapped from the hospital. The family decided he needed a safer place to stay. With the help of some priests and nuns, they transferred him to a secret place where the landowners could not find him. After a year in the hospital and in hiding, he returned to his home in the village, but, according to Rigoberta, he was not the same.

When her father was in the hospital he talked to many people in the region and found that indigenous peoples in other areas were also being treated badly and faced eviction from their land. He continued to work with the unions, traveling and fighting for his community. Rigoberta traveled with her father learning about the things he was doing. She was also learning Spanish from the nuns and priests who were helping them. Some Europeans were sending money to help support their cause.

13 Peasants Unity Committee protests

Peasants Unity Committee protests

Then in 1977, authorities arrested him again and put him in prison, charged as a political prisoner and sentenced to life imprisonment. But her father was not alone; priests, nuns, the unions, and the community supported him in his fight. The unions pressed for his release. After imprisonment for only 15 days, he was suddenly released. While in prison, he met a fellow prisoner who told him the peasants should unite and form a Peasants’ League to reclaim their lands. Upon his release, her father joined with other peasants and started the Peasant Unity Committee (CUC). They all started thinking about the roots of their problems and came to the conclusion that everything stemmed from the ownership of land. The best land was not in the peasants’ hands but belonged to the big landowners. Every time these landowners saw that the peasants had new land, they tried to throw them off of it and steal it from them.

It was at this point that Rigoberta began to learn about politics. She wanted to find out about the problems indigenous peoples faced in the rest of Guatemala. The CUC started to grow and spread like wildfire among the Guatemalan peasants. She began to see that the root of her people’s problems was exploitation. The rich got richer because they exploited the labor of the poor. She also saw that the ladinos were culturally oppressing her people by taking away their traditional way of life and preventing them from unifying. She started to work as an organizer and continued to learn Spanish. She joined the CUC in 1979 and traveled to different areas of Guatemala. But a main barrier in her interaction with different people in her country was that they couldn’t understand each other. She couldn’t speak their indigenous language, other than Quiche, and they couldn’t speak Spanish. So, along with Spanish, she began to learn three other indigenous languages. One of the issues that she worked on was the barrier between the ladino and indigenous communities. The ladinos were a minority in Guatemala, since indigenous people made up 60 percent of the population. She found, to her surprise, that not all ladinos were rich; many were very poor, but they felt superior to indigenous people. This sense of superiority prevented the two groups of poor people from unifying together to solve their common problems.

Guatemalan Civil War

Guatemalan Civil War

In 1979, the government began a crackdown on her family and other members of the CUC. Government soldiers accused her little brother, who was doing organizing work as well, of being a communist. The soldiers took him away and beat and tortured him for over 16 days. They cut off his fingernails and then his fingers, cut off his skin, burned part of his skin, and then cut off the fleshy part of his face. Twenty men with him had also been tortured and one woman had been raped and then tortured. They died a horrible death. No one was held responsible for their deaths. On January 31, 1982, security forces killed her father when he and other peasants occupied the Spanish Embassy in the capital to protest the plight of Guatemalan Indians. Rigoberta’s father, Vicente Menchu, had become a national hero and led the protest. In this same span of time, high-ranking army officers kidnapped, raped, and tortured her mother, who also died a horrible death.

Rigoberto Menchu's biography

Rigoberta Menchu’s autobiography

The Guatemalan government wanted Rigoberta, but after her mother’s death she fled to Mexico. While in Mexico, she dictated her autobiography, I, Rigoberta Menchu (1984), telling the world not only about her own story, but also about the lives of her fellow indigenous peoples. Her book and her social justice campaign brought international attention to the conflict between indigenous peoples and the military government of Guatemala. In 1992, she was awarded the Nobel Peace Prize and used the $1.2 million cash prize to set up a foundation in her father’s name to continue the fight for human rights of indigenous peoples. Due to her efforts, the United Nations declared 1993 the International Year for Indigenous Populations. Menchú now serves as a UNESCO Goodwill Ambassador and is a figure in indigenous political parties. She unsuccessfully ran for President of Guatemala in 2007 and 2011.

 

questions-to-consider

  1. What do you think was Rigoberta Menchu’s biggest contribution to promoting human rights for indigenous peoples?
  2. How was her struggle similar and different from other human rights activists you know of?
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Rigoberta Menchu: The Beginning of an Indigenous Activist, Part I (Part II coming June 21st)

Excerpted from Dr. Ames’ recently released book Human Rights: Towards a Global Values System.

Rigoberta Menchu

Rigoberta Menchu

“We Indians never do anything which goes against the laws of our ancestors.” –Rigoberta Menchu 

Rigoberta Menchu’s harrowing story spans her childhood growing up poor in a poor country, as an indigenous person with a culture different from modern culture, and as a global activist fighting for the rights of indigenous peoples. In a sense, she speaks for all indigenous peoples of the American continent. The cultural discrimination she has suffered is something that all the continent’s indigenous peoples have been experiencing since the Spanish conquest. Her voice allows indigenous peoples to speak. She is a witness who has survived the violence aimed at destroying her family, community and culture, and she is stubbornly determined to break the silence and to confront the systematic extermination of her people.

Map of Guatemala

Map of Guatemala

Menchu belongs to the Quiche people (a branch of the Mayans), one of the largest of the 23 ethnic groups in Guatemala, each having its own language. She was born on January 9, 1959 in the hamlet of Chimel on the Altiplano (highlands) to a poor peasant family who lived in a village in the northwestern Guatemalan province of El Quiche. She was immersed in the Mayan culture. In her biography, Menchu tells the story of the Guatemalan people and her personal experiences, which are, in essence, the reality of a whole people. Colonial powers have historically oppressed her people, and she is determined to make sure that the sacrifices her family and community have made to fight this oppression will not have been in vain. She makes it clear that “Latin Americans are only too ready to denounce the unequal relations that exist between ourselves and North America, but we tend to forget that we too are oppressors and that we too are involved in relations that can only be described as colonial. In countries with a large Indian population, there is an internal colonialism which works to the detriment of the indigenous population.”

Mayan Tikal Central Plaza

Mayan Tikal Central Plaza

To Rigoberta Menchu, living in the village of Chimel as a child was paradise. It had no big roads and no cars. People could only reach it by foot or horseback. Her parents moved to Chimel in 1960 and began cultivating the land. No one had lived there before because it was very mountainous, but they were determined to stay no matter how hard the life. They had been forced to leave their previous hometown because ladinos (Guatemalans of mixed Spanish and Indian ancestry) settled there and gradually took control. Her parents spent all they earned and accumulated so much debt that finally they had to leave their house to pay the ladinos. Continue reading

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Part 2: Muhammad Yunus and Grameen Bank: Banking for the Poor

Excerpted from Dr. Denise Ames’ forthcoming book: Human Rights: Towards a Global Values System.

My greatest challenge has been to change the mindset of people. Mindsets play strange tricks on us. We see things the way our minds have instructed our eyes to see.”

– Muhammad Yunus

Defending human rights takes many forms. Muhammad Yunus took the path of defending the human rights of some of the poorest women in the world through economic empowerment. His strategy of lending money to poor women and requiring them to pay it back with interest enhanced not only their own lives but that of their families’ as well.

Grameen bank logoIn 1983, after 7 years of experimenting, Yunus officially started the Grameen Bank. The word Grameen, is from the word gram or village, and means “of the village” in the Bengal language. This revolutionary bank is still going strong today with 2.4 million families with loans, and more than 1,050 branches serving 35,000 villages in Bangladesh; 94 percent of the clients are women. Its rules are strict. Initial loans are as little as $10 dollars and must be repaid with 20 percent interest; 98 percent of Grameen’s borrowers repay their loans in full, a rate of return far higher than other banks.

Yunus was able to overcome two major obstacles when he started the Grameen program. First, commercial banks discriminated against women. He overcame this obstacle with trust-building and designing a system that built on women’s support groups. Secondly, commercial banks had blocked credit to the poor by demanding collateral, something no poor person had. He found that the poor do have an intangible type of collateral. They will probably need a second or third loan; therefore, their collateral is to be timely and responsible in their payments so they can establish a good credit record.

07 Chanda

Chanda from Bangladesh

According to Yunus, Grameen Bank has worked in ways not initially anticipated. For instance, some women borrowers decided to commit themselves to a set of promises that they called the “sixteen decisions.” These are commitments that the women borrowers agreed upon to help improve themselves and their families above and beyond the loans. They decided to maintain discipline, to create unity, to act with courage, and to work hard in all of their endeavors. They agreed to keep their families small and to send their children to school, to plant as many tree seedlings as possible, and even to eat vegetables. These are some of the resolutions the women created; the bank did not impose them.

Grameen is involved in transformation. The clients are transforming their lives from powerless and dependent to self-sufficient, independent, and politically aware. The next generation will reap the benefits; a generation with better food, education, medication, and the firsthand satisfaction of taking control of their lives. The 16 decisions are an example of the transformation. Yunus has found that Grameen children attend school in record numbers because their mothers really take that commitment seriously. Now many of the children are continuing in colleges, universities, and going to medical schools. Grameen Bank recently came up with another loan product to finance higher education for all Grameen children in professional schools.

Milena from Bolivia

Milena from Bolivia

Yunus cited resistance to his program from husbands who felt insulted, humiliated, and threatened that the bank gave loans to their wives and not them. Sometimes the tension within the family led to violence against the women. In response to this problem, the bankers decided to start meeting with the husbands and explained the program in a way that they could see how it would benefit their family. They also arranged to meet with husbands and wives together so everyone understood the expectations. Easing the husband’s concerns reduced their initial resistance. Some neighborhood men opposed the program because of religious objections. The bank carefully examined whether the program was in some way anti-religious, but found that these critics actually cloaked their opposition to women’s independence in religious trappings instead of admitting that they felt threatened. According to Yunus, “It was the male ego speaking in religious terms. We found that it was best to give the program some time. It soon became clear that the women borrowers were still attending to their religious duties, at the same time earning money and becoming confident.” Women even started confronting the religious critics.

Yunus pointed out that the Grameen Bank program received some of the strongest criticism from development professionals. Grameen bankers never expected opposition from the development quarter, but it happened and became controversial. Development has traditionally been multi-million dollar loans from the World Bank or other big Western and Chinese banks for large infrastructure development projects, such as dams, highways, ports, irrigation projects, and airports. The money for these projects would go to a large Western multi-national corporation or Chinese state enterprise that would employ a few local laborers (men). The profits mostly would go to the upper level management of the multi-national corporation or state enterprises and little if any would “trickle down” to poor local people. The large development projects would have no positive effect on women’s lives.

Grameen Bank Building, Dhaka, Bangladesh

Grameen Bank Building, Dhaka, Bangladesh

The development projects were just the opposite of what Yunus and his bank were doing. Critics insisted that giving tiny loans to women who do not have knowledge and skills does not bring about real change in the country or the village and is not true development. The real issue was Yunus and the Grameen Bank offered a different kind of development that challenged the powerful. Their grassroots method threatened profits for multi-nationals and the kickbacks to local officials; therefore, critics ridiculed and dismissed their program. Yunus adds, “What we do is not in the development professionals’ or academics’ book. It does not fit into their universe. If you are an academic, you wander around in your abstract world, and decide microcredit programs are silly because they don’t fit your ideas.” But Yunus forcefully claims, “I work with real people in the real world. So whenever academics or [development] professionals try to draw those conclusions, I get upset and go back and work with my borrowers—and then I know who is right.”

Family receiving a loan

Yunus has garnered world-wide attention and praise for his grassroots, ground-breaking strategy of working to alleviate world poverty. In 2006, Yunus and the Grameen Bank were jointly awarded the Nobel Peace Prize “for their efforts to create economic and social development from below.” He is one of the founding members of Global Elders, a group of public figures noted as elder statesmen, peace activists, and human rights advocates. The goal of the group is to solve global problems with over 1,000 years of experience among individual members. Yunus said he would use part of his share of the $1.4 million award money to create a company to make low-cost, high-nutrition food for the poor. The rest would go toward setting up an eye hospital for the poor in Bangladesh. The food company, Social Business Enterprise, will sell food for a nominal price. Yunus has taken his Boy Scout motto to heart, showing compassion for all, in all of his endeavors.

questions-to-consider

  1. Why would development officials and academics criticize Yunus and the Grameen bank? Do you think they are justified in their criticism?
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