U.S. food stamp use up sharply, sign of hard times (Reuters) by Charles Abbott

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1. Fiscal policy and the “vicious” business cycle
2. Does expansionary fiscal policy “pay for itself”?
3. The “teenager tax” – why expansionary fiscal policy just ain’t fair!

Shanghai Daily, Oct 22, 2007: How happy are we?-Let’s measure Gross National Happiness

When I first talked to Mr.Welker about a writing a blog entry about an alternative measurement of well-being to GDP and GNP, called the Gross National Happiness quotient, he gave me one those “looks”. I perceived the look to mean, “you are like a peace loving, hippy dippy gal from the East Coast, Ms. Close… this is economics we are doing here!” Of course, Mr. Welker would never admit that was what he was thinking because he is far too nice for that. But, I am happy to say that I am finally writing this entry because I finally have Oxford University and Cambridge University in England to back me up on this, Happiness Research.

These famous educational institution have their economists developing new ways to measure well being from an holistic economic perspective. Economists and sociologists all over the world, especially those interested in international development models are seeking to, “establish scientific methods for finding our what makes us happy and why”.

Happiness and well-being are complicated. Researchers cite many factors, like education, nutrition, freedom from fear and violence, gender equality, and perhaps most important, having choices, write Authur Max and Toby Sterling.

Two researchers , Ruut Veenhovern, Professor University of Rotterdam,, and Adrian White of the University of Leicester, have been collecting data for years. Veenhoven’s data base, called the “World Database of Happiness”, has data on 95 countries while White has created the “Global Projection of Subjective Well-Being” on twice that many countries. Both researchers have found that Denmark is the country where inhabitants have he highest rating of well being and happiness. Veenhovern was surprised by some of his findings.

Veenhoven’s database, which lists 95 countries and regions, is headed by Denmark with a rating of 8.2, followed by Switzerland, Austria, Iceland and Finland, all countries with high per capita income. At the other end of the scale are much poorer countries: Tanzania rated 3.2, behind Zimbabwe, Moldova, Ukraine and Armenia.

The United States just makes it into the top 15 with a 7.4 index rating. While choice is abundant in America, nutrition and violence issues helped drag its rating down.

Wealth counts, but most studies of individuals show income disparities count more. Surprisingly, however, citizens are no happier in welfare states, which strive to mitigate the distortions of capitalism than in purer free-market economies.

“In the beginning, I didn’t believe my eyes,” said Veenhoven of his data. “Icelanders are just as happy as Swedes, yet their country spends half what Sweden does (per capita) on social welfare,” he said.

Another reaseacher Alkire, emphasized personal freedom as the root of happiness. Her study of women in the southern Indian state of Kerala, which showed that poor women who make their own choices score highly, compared with women with strict fathers or husbands.

Bhutan, which has a 50% illiteracy rate came up in the top 8 in White’s list of happy nations because its measure of “gross national happiness” (GNH) is based on, “equitable development, environmental conservation, cultural heritage and good government”.

So, what should policy makers consider when they are trying to improve the economy, there are different perspectives: Veenhoven says that with the right combination of individual choices and government policy, nations can raise their happiness quotient by as much as five percent.

British opposition leader David Cameron recently established a Quality of Life Policy Group to examine ways governments can legislate to boost national contentment levels. He said in a speech last year:

“It’s time we admitted that there’s more to life than money, and it’s time we focused not just on GDP, but on GWB – general well-being,”

In the end the researchers discovered that, “Happiness is more complicated than we originally thought,” said Alkire.

I guess I am not alone in ” the peace loving, hippy dippy world ” of measuring economic well being. While some say that money can buy happiness it seems like there is a whole lot more to happiness than cash… Thank goodness!

Editor’s note: For the record, while I may not own any tie dyed shirts, wear flowers in my hair or Birkenstocks on my feet, dance in circles while listening to the Grateful Dead and day-dream about my own “summer of love” (like Ms. Close on weekends), I do advocate the development of alternative measures of economic and social well-being. The current method of measuring wealth by the access to physical output per-capita distorts what I believe are the true measures of happiness.

The failure of GDP to account for environmental conservation, racial diversity and harmony, equality of income and wealth distribution, access to safe and healthy living environments and so on creates the flawed perception that output growth is the end-all-be-all of economic development. Poor countries and rich countries alike could benefit from the wide-spread adoption of a qualitative measurement of well-being that more effectively incorporates the non-monetary, non-output related components of human welfare and happiness!

Peace, man… JW

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US Trio Wins Nobel prize By Vinnee Tong, NEW YORK (AP)

It is very exciting that three Economics professors from the US have received recognition from the Nobel Foundation and have been awarded the Nobel Economics prize. All three professors, including, 90 year old Emeritus Professor Leonid Hurwicz, have been working the since 1960′s investigating “how people’s knowledge and self-interest affect their behavior in the market or in social situations such as voting and labor negotiations.”

While some of these ideas will sound familiar to you now as an “experienced” AP Economics students, their “mechanism design theory” will be new to you. This theory builds on another theory that we will discuss later on this year, Game Theory. What I appreciate about the these three professors is that they have been dedicated to developing economic theories in order to understand real life situations. One professor has even applied his formula in such a way that he has written about how it can be used to rebuild the government in Iraq. Essentially, the three men studied how game theory can help determine the best, most efficient method for decision-making.

Essentially, the three men studied how game theory can help determine the best, most efficient method for decision-making.

Game theory was advanced by John Nash, the subject of the film “A Beautiful Mind” and who received the prize in 1994.

Stephen Morris, an economics professor at Princeton University, said a big part of why the winners were chosen was their proof of how people deciding as a group can lead to a best outcome for many transactions, whether it’s in a marketplace or in the political arena.

He added that he thought the academy’s choice would be popular among economists, saying: “I think it was seen as inevitable that this work should be recognized somehow.”

Much like game theory, mechanism design is applied to situations where perfect markets cannot be found, such as a political give-and-take between different interest groups or even within companies themselves.

The trio’s work showed how to reach a desired outcome, such as improvements in social welfare or fatter profits, and what sort of government regulation should be put into place.

Myerson explored the concept in detail in his work, “Game Theory: Analysis of Conflict,” and built a mathematical model that analyzed elections. Myerson has even extended his work to examining how best to rebuild a government in Iraq.

“Chances for successful democracy may depend critically on introducing the right kind of transitional structures,” he wrote in a May 2003 editorial titled, “How to build democracy in Iraq.”
Game theory was advanced by John Nash, the subject of the film “A Beautiful Mind” and who received the prize in 1994.

Stephen Morris, an economics professor at Princeton University, said a big part of why the winners were chosen was their proof of how people deciding as a group can lead to a best outcome for many transactions, whether it’s in a marketplace or in the political arena.

He added that he thought the academy’s choice would be popular among economists, saying: “I think it was seen as inevitable that this work should be recognized somehow.”

Much like game theory, mechanism design is applied to situations where perfect markets cannot be found, such as a political give-and-take between different interest groups or even within companies themselves.

The trio’s work showed how to reach a desired outcome, such as improvements in social welfare or fatter profits, and what sort of government regulation should be put into place.

Myerson explored the concept in detail in his work, “Game Theory: Analysis of Conflict,” and built a mathematical model that analyzed elections. Myerson has even extended his work to examining how best to rebuild a government in Iraq.

“Chances for successful democracy may depend critically on introducing the right kind of transitional structures,” he wrote in a May 2003 editorial titled, “How to build democracy in Iraq.”

Essentially, the three men studied how game theory can help determine the best, most efficient method for decision-making.

Game theory was advanced by John Nash, the subject of the film “A Beautiful Mind” and who received the prize in 1994.

Stephen Morris, an economics professor at Princeton University, said a big part of why the winners were chosen was their proof of how people deciding as a group can lead to a best outcome for many transactions, whether it’s in a marketplace or in the political arena.

He added that he thought the academy’s choice would be popular among economists, saying: “I think it was seen as inevitable that this work should be recognized somehow.”

Much like game theory, mechanism design is applied to situations where perfect markets cannot be found, such as a political give-and-take between different interest groups or even within companies themselves.

The trio’s work showed how to reach a desired outcome, such as improvements in social welfare or fatter profits, and what sort of government regulation should be put into place.

Myerson explored the concept in detail in his work, “Game Theory: Analysis of Conflict,” and built a mathematical model that analyzed elections. Myerson has even extended his work to examining how best to rebuild a government in Iraq.

“Chances for successful democracy may depend critically on introducing the right kind of transitional structures,” he wrote in a May 2003 editorial titled, “How to build democracy in Iraq.”

I hope that you take time to read the article and to research the three professors and their work.

Related posts:

1. The “delicate balance of terror”: How game theory can be used to predict firm behavior (oh, and save the human race from utter annihilation)
2. Economics for Citizenship / The 180 Degree Science!

New York Times – Don’t Even Think of Touching That Cupcake

I had to post this article. It would have been a crime not to. Seriously, there are economic implications to bans on cupcakes in school and changes in attitudes about cupcakes. You are bright AP and IB Economics students, you figure out the economic implications and then post a comment with your economic analyisis. What does this attack on cupcakes really mean from an economist point of view?

And what is presidential hopeful Hillary Clinton’s stance on the great cupcake debate? The writing’s on the wall folks… promise #9…

Click here to view the embedded video.

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Consumers cutting back on restaurants: survey Reuters, September 25, 2007

For all my Year 1 IB Economics students out there, here is an example of an short and sweet article that brings to life many of the economic principles that we have been studying in Unit II. Since all IB Year 1 students will be writing their first Internal Assessment during the second week of October (when I am away for China Alive), I wanted to post something just for you to help you prepare.

So, why is this article appropriate for an IA Assessment? First, it is was written in the last 6 months. Second, it is not found in the Economist but it is written by a writer from who has not done a complete economic analysis of the events. That means that there is still room for you to do it. Third, even though some economic ideas are mentioned in the article, the price elasticity of demand as a factor in why people are “cutting back on restaurants” is never mentioned. So, the article is written in such away that there is room for your own independent Demand/Supply Analysis including a whole analysis on the Price Elasticity of Demand for Restaurant Meals.

IB Students, you will need an article in hand on October 8th. Start looking online, New York Times, Reuters, Yahoo, Times, Newsweek, your home country’s newspaper (for me that would be the Boston Globe. So, check out the front page news. Do not go straight to the business section. Consult your IA handbooks and bring them to class.

Ready, set…. search…

Related posts:

1. Welcome to my 2008-2009 Economics students
2. IB Economics students’ World Bank development project proposals: Students request funds to improve human welfare in the world’s poorest countries
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Mali’s Farmers Discover a Weed’s Potential Power – Sept 6, New York Times

Can it be possible that a new use for an old weed could change the economic health of a nation and at the same time defy the law of opportunity costs? In Mali, farmers are choosing to plant more of weed called jatropha becuase it can now be turned into biofuel. It is a unique plant in that it needs marginal soil and requires little fertilizer. In class we have talked about how discovering a new resource can cause economic growth, how this can shift the PPC curve. But, can a country actually get the benefits of using this new resource with out any opportunity cost? Is what is happening in Mali an example of economic development or economic growth in the first place? Is this a supply or a demand issue?

But now that a plant called jatropha is being hailed by scientists and policy makers as a potentially ideal source of biofuel, a plant that can grow in marginal soil or beside food crops, that does not require a lot of fertilizer and yields many times as much biofuel per acre planted as corn and many other potential biofuels. By planting a row of jatropha for every seven rows of regular crops, Mr. Banani could double his income on the field in the first year and lose none of his usual yield from his field.

You be the judge of why Mali is making the decision to produce more jatropha. Is this a case for demand or supply? Which curve would shift? Which determinant is causing this shift?

But here in Mali, one of the poorest nations on earth, a number of small-scale projects aimed at solving local problems — the lack of electricity and rural poverty — are blossoming across the country to use the existing supply of jatropha to fuel specially modified generators in villages far off the electrical grid.

“We are focused on solving our own energy problems and reducing poverty,” said Aboubacar Samaké, director of a government project aimed at promoting renewable energy. “If it helps the world, that is good, too.”

This is very interesting information for you to consider as you are wondering about environmental sustainability, a real life economic issue.

Jatropha’s proponents say it avoids the major pitfalls of other biofuels, which pose significant environmental and social risks. Places that struggle to feed their populations, like Mali and the rest of the arid Sahel region, can scarcely afford to give up cultivable land for growing biofuel crops. Other potential biofuels, like palm oil, have encountered resistance by environmentalists because plantations have encroached on rain forests and other natural habitats.

But jatropha can grow on virtually barren land with relatively little rainfall, so it can be planted in places where food does not grow well. It can also be planted beside other crops farmers grow here, like millet, peanuts and beans, without substantially reducing the yield of the fields; it may even help improve output of food crops by, among other things, preventing erosion and keeping animals out.

So try to apply what you have learned about opportunity costs, economic growth and development, as well as supply and demand and analyze these economic events in Mali. I look forward to your comments

Related posts:

1. Does economic growth = economic development? Not for China’s rural poor…
2. Lesson Plan: Visualizing Economic Growth and Economic Development
3. Models of Economic Growth and Development

China’s Influence Spreads Around World, Associated Press, September 2, 2007

Many articles about China focus on the impact of Chinese exports. This article takes on a different approach. It focuses on China the importer and assesses the impact that China, the importer, has on the economic growth of other nations. While it is clear that China, the supplier and exporter of goods has made a huge imprint on the lives of millions of consumers, readers are reminded that when one billion Chinese people demand a certain product, China often has to look to other nations to supply them with the parts, the machinery, the natural resources and sometimes the finished goods to meet this demand.

For years, China’s booming economy touched daily life in the West most visibly through the “made-in-China” label on everything from clothes to computers. But now, economic growth is giving rise to something more that can’t be measured just by widgets and gadgets – a shift in China’s balance of power with the rest of the world.

China’s reach now extends from the Australian desert through the Sahara to the Amazonian jungle – and it’s those regions supplying goods for China, not just the other way around. China has stepped up its political and diplomatic presence, most notably in Africa, where it is funneling billions of dollars in aid. And it is increasingly shaping the lifestyle of people around the world, as the United States did before it, right down to the Mandarin-language courses being taught in schools from Argentina to Virginia.

While some countries question China’s political and economics decisions, i.e; who China decides to trade with, such as Sudan, it is clear that China , the importer, has had a huge impact of the economies of other nations such as Australia, Brazil, Liberia and Poland. Of course, China ,the importer, does not exist without controversy. As the article’s title states, China’s influence is spreading even further and deeper into the world’s economy and some nations may not be catching on to these reforms and as a rsult may lose out economically. Be sure to read the article AND watch the multimedia video to learn more.

Related posts:

1. China makes, the world takes
2. China: formerly the world’s factory, now a nation of consumers…
3. “A glimmer of hope” – rising incomes in China lead to rising demand for US exports

China Chokes – New York Times, August 26, 2007

This article, one in a series of articles yet to come, is a must read for all IB and AP Economics students. The particular article investigates the effects of China’s massive growth on its population, its environment. and on its pollution levels. The authors present videos, photographs, interactive maps in their article in order to graphically illustrate the many ways that China is affected by its rapid economic progress.

As economists, we all know that there are opportunity costs to all decisions and this article looks at the “costs” of China’s massive economic growth. One video includes information about China’s attempt to apply a Green GDP formula to its own growth and sobered by the outcome. Another interactive map compares economic growth rate of different countries around the world while another looks at the carbon emission rate of different countries. The point is that this article is meant to be very interactive so that the reader can experience how China is choking on its own growth. It is your turn to find out.

Related posts:

1. Does economic growth = economic development? Not for China’s rural poor…
2. Walking the fine line between good growth and bad growth in China
3. Big trouble in little China – how slowing growth may mean major problems for the Chinese Communist Party

Entrepreneurs From China Flourish in Africa- New York Time, August 18, 2007

One of my AP students recently asked me to explain why entrepreneurship was considered one of the four factors of production by economists. He questioned the nature of this “fourth factor of production” because unlike the other types of resources it was less obvious to him how this resource fit into the product market. In the product market, good and services are paid for directly by consumers. but how did entrepreneurs play a direct role in this market.

Part of the problem is that entrepreneurs truly belong in the factor market, a market that students new to economics are less acquainted with and one that both AP and IB students will be learning about this semester. Entrepreneurs are the “behind the scene” people. They are the “big ideas” people. They visionaries in business who figure out how to utilize all the other factors of production in order to make a good or service that will result in a profit.

I found the above New York times article about Chinese Entrepreneurs who have “taken the big risk” of moving to Africa in search of a better life and good profits extremely interesting. Chinese entrepreneur are moving into new territories in order to seek their fortunes, in places that many others have not dared to go before them because of a fear of violence, a fear of unfriendly governments or a fear of people. These are places where poverty and opportunity are rampant. Mr.Yang, an entrepreneur from the Fujian Province in China is a true risk taker and can teach all economics students about the meaning of entrepreneurship: the good, the bad and the ugly.

What set him apart was his destination. Instead of the traditional adopted homelands like the United States and Europe, where Fujian people have settled by the hundreds of thousands, he chose this small, landlocked country in southern Africa.

“Before I left China,” said Mr. Yang, now 25, “I thought Africa was all one big desert.” So he figured that ice cream would be in high demand, and with money pooled from relatives and friends, he created his own factory at the edge of Lilongwe, Malawi’s capital. The climate is in fact subtropical, but that has not stopped his ice cream company from becoming the country’s biggest.

Stories like this have become legion across Africa in the past five years or so, as hundreds of thousands of Chinese have discovered the continent, setting off to do business in a part of the world that had been terra incognita. The Xinhua News Agency recently estimated that at least 750,000 Chinese were working or living for

extended periods on the continent, a reflection of deepening economic ties between China and Africa that reached $55 billion in trade in 2006, compared with less than $10 million a generation earlier.

Today, in many of the countries where the new Chinese emigrants have settled, like Chad, Chinese-owned pharmacies, massage parlors and restaurants serving a variety of regional Chinese cuisines can be found; the Western presence, once dominant, has steadily dwindled, and essentially consists nowadays of relief experts working international agencies or oil workers, living behind high walls in heavily guarded enclaves.

At first, this new Chinese exodus was driven largely by word of mouth, as pioneers like Mr. Yang relayed news back home of abundant opportunities in a part of the world where many economies lie undeveloped or in ruins, and where even in the richer countries many things taken for granted in the developed world await builders and investors.

Conditions like these often deter Western investors, but for many budding Chinese entrepreneurs, Africa’s emerging economies are inviting precisely because they seem small and accessible. Competition is often weak or nonexistent, and for African customers, the low price of many Chinese goods and services make them more affordable than their Western counterparts.

Not everything that these entrepreneurs have touched is pretty. Some locals have come to resent Chinese entrepreneurs and accuse them of entering local markets where local business owners can not compete with such low prices.

Africans view the influx of Chinese with a mix of anticipation and dread. Business leaders in Chad, a central African nation with deepening oil ties to China, are bracing for what they suspect will be an army of Chinese workers and investors.

“We expect a large influx of at least 40,000 Chinese in the coming years,” said Renaud Dinguemnaial, director of Chad’s Chamber of Commerce. “This massive arrival could be a plus for the economy, but we are also worried. When they arrive, will they bring their own workers, stay in their own houses, send all their money home?”

In Zambia, where anti-Chinese sentiment has been building for several years, merchants at the central market in Lusaka, the capital, said that if Chinese people wanted to come to Africa, they should come as investors, building factories, not as petty traders who compete for already scarce customers for bottom-dollar items like flip-flops and T-shirts.

“The Chinese claim to come here as investors, but they are trading just like us,” said Dorothy Mainga, who sells knockoff Puma sneakers and Harley Davidson T-shirts in the Kamwala Market in Lusaka. “They are selling the same things we are selling at cheap prices. We pay duty and tax, but they use their connections to avoid paying tax.”

Whatever becomes of official Chinese-African economic ties, entrepreneurs like Mr. Yang will continue to take a leap of faith in the name of profit. He sounds like one “smart cookie” who as learned how to be a successful entrepreneur in Africa

After nearly seven years in Malawi, Yang Jie, the ice cream maker, seems to have learned better. Greeting his workers at the ice cream factory, he begins the day by asking, “How did you sleep last night?”

One quickly replied, “Very well,” sounding a bit formal.

“Don’t tell me a lie,” Mr. Yang answered with a sly, friendly smile. “It’s O.K. to tell me your worries.”

Be sure to check out the slide show in the article.

No related posts.

Starbucks Raising US Drink Prices Next Week – Reuters.com

One of the first things that my jet lagged family noticed when we got back from San Francisco was that Starbucks had opened up around the corner from our house in Zhudi Town. Normally, my family travels far and wide to buy coffee beans at the Starbucks in Gubei or at the Portman because my husband Kevin, a sophisticated caffeine addict, needs his well roasted coffee. Now my husband can just walk down the street to find his fix. Let’s just say that he now is very happy. My kids, Maya and Cooper, are extremely happy too because when they walked into the Starbucks Café, some smiling ladies behind the counter gave each of them a free gift. The gift was small packet of yellow sculpting clay. So much for teaching them that there is “no such thing as a free lunch” early in life.

I, on the other hand, had a lot of unanswered economic questions running through my mind when we into the café, For example, why did Starbucks open up here in Zhudi? What would this mean for my favorite local joint, The Rendevous Café? Is competition always a good thing? And what about my core value of “think globally and buy locally”? All of these questions continued swirling around in my mind as I had breakfast (with nicely brewed tea) at the newly updated Rendevous Café. As we were eating, the local owners came by our table and personally welcomed us back from vacation. I commented on how nice the place looked and the owners told me that the updates to the restaurant were a response to the new competition from Starbucks and Johnny Moos. The owners looked a little worried. For a long time they have been the only place in town where locals and SAS faculty and students could stop by for a western breakfast, lunch, dinner or coffee. Now, there is real competition. Rendevous’ food is definitely good but can they survive with this competition?

I ran home (well, a little overstated) and got online to see if I could catch up on the latest information about Starbucks Inc. and their plans for China. I was amazed to learn that Starbucks had just announced,

“Starbucks Corp will raise U.S. prices on coffee, lattes and other drinks by an average of 9 cents a cup next week to help offset soaring costs for milk and other commodities, a spokesman said on Monday, July 23, 2007.The widely anticipated move marks Starbucks’ second price increase in less than a year and comes a month after the coffee shop chain’s chief financial officer warned it would be “very challenging” for Starbucks to meet the high end of its 2007 earnings forecast, in part because of rising dairy prices.”

Also it was noted on a Chinese business website that in China, Starbucks will increase the price of their coffee drinks by as much as 5RMB in Beijing and 3RMB in Guangzhou. Dessert prices will remain the same. That got me wondering again, what is going to happen if the price of coffee drinks go up just as this new Starbucks is taking off in Zhudi Town? Will people stop going to Starbucks because of the increase in the cost of coffee drinks?

So, Starbucks has arrived in Zhudi. I know that many people are really happy but I am not sure if it is time to say hooray just yet. We will have to let the free market forces go forth and let the chips fall where they may. I certainly hope that Rendezvous Café is still standing when all the chips have fallen.

Discussion Questions:

1. What economic forces brought Starbucks to Zhudi? Name them and graph them.
2. What kind of market structure do fast food/coffee restaurants have? Explain. How do they compete with each other.
3. Will an increase in price of Starbucks coffee drinks affect people’s decision to buy coffee from Starbucks? Why? Why not?
   
4. Is there really such a thing as a, “free lunch? Explain.
   
5. Can Rendezvous café survive given its competition?

Related posts:

1. SAS Economists Podcast #5 – What does the Caramel Frappuchino mean to Starbucks?
2. Starbucks instant coffee: a sign of the times?
3. SAS Economists Podcast #2: Determinants of demand for Starbucks vs. The Coffee Bean

Design That Solves Problems for the World’s Poor – New York Times

It is a luxury right now to sit back and peruse articles about economic topics that interest me. Economic development has been a passion of mine yet I have not had the opportunity to share my passion about economic development with my current AP students. The AP syllabus does not cover this topic and the Lorenz curve is about the closest that my AP student came to learning about income distribution and poverty. This was not an authentic study of or discussion about effective economic development.

So, I was pleased to read the article by Donald McNeil in today’s (5/29/07) New York Times which highlighted a show at the Cooper –Hewitt Design Museum where designers displayed the products that designed to serve the needs of the world’s poor. These products were created to enhance the quality of life of poor people world wide. They were designed as products that would assist the world’s poorest people in climbing the “self sufficiency” economic ladder.

“A billion customers in the world,” Dr. Paul Polak told a crowd of inventors recently, “are waiting for a $2 pair of eyeglasses, a $10 solar lantern and a $100 house.” The world’s cleverest designers, said Dr. Polak, a former psychiatrist who now runs an organization helping poor farmers become entrepreneurs, cater to the globe’s richest 10 percent, creating items like wine labels, couture and Maseratis. “We need a revolution to reverse that silly ratio,” he said.

The designers created new ways to transport water, created human powered water pumps to enable planting during the dry seasons, and designed an apparatus to clean water for drinking as you sip it directly from streams, rivers and lakes. So many inventors spend so much time designing goods and services for the rich that if in this ‘new revolution” were to take hold, the world’s poor might just find ways to make themselves richer.

What I like about this approach to economic development is that it involves giving the poorest members of our world community the tools that they will need to become independent entrepreneurs who will build their own economic success. This is not a “give them some food to eat”, “give them a dam that they don’t need” or a give them some “charity” type of economic development. It is much more than that…The artists and inventors themselves knew that:

“Interestingly, most of the designers who spoke at the opening of the exhibition spurned the idea of charity.

“The No. 1 need that poor people have is a way to make more cash,” said Martin Fisher, an engineer who founded KickStart, an organization that says it has helped 230,000 people escape poverty. It sells human-powered pumps costing $35 to $95.

Pumping water can help a farmer grow grain in the dry season, when it fetches triple the normal price. Dr. Fisher described customers who had skipped meals for weeks to buy a pump and then earned $1,000 the next year selling vegetables.

“Most of the world’s poor are subsistence farmers, so they need a business model that lets them make money in three to six months, which is one growing season,” he said. KickStart accepts grants to support its advertising and find networks of sellers supplied with spare parts, for example”

Now that is the kind of economic development revolution that I want to be part of. For more information about a truly successful worldwide economic development program for woman, check out the Grameen Bank and/or the Grameen Foundation. Both programs combine the power of microfinance, technology and innovative solutions to defeat global poverty. They too put tools in the hands of poor women. The Founder, Muhammad Yunus just won the 2006 Nobel Peace Prize for his work and for his foundation. His work inspires me..

Related posts:

1. Does economic growth = economic development? Not for China’s rural poor…
2. IB: Economic development and fertility rates in India
3. Fair versus Free Trade as means to promote Economic Development