Microcredit: fulfilling or belying the universalist morality of globalizing markets?

AuthorAnderson, Kenneth
  1. INTRODUCTION: MICROCREDIT AND GLOBALIZING MARKETS

    This is an article about microcredit.(2) Microcredit is a widespread, indeed celebrated, tool of contemporary international economic development work. Microcredit programs provide the poor with credit, capital, and training with which to establish their own small businesses, to become, in other words, small-scale capitalists--on the condition, however, of repaying the initial investment in their enterprises so that those funds can be recycled in new investments to poor people. Run by nongovernmental organizations (NGOs) or, in some cases, governmental aid agencies, in many places throughout the world, microcredit programs have emerged as an important mechanism on which the international development community has pinned its hopes for assisting millions of people out of poverty.

    This is also, indirectly, an article about globalization and specifically about globalizing markets. Globalization is the process, we are told, that is remaking the world in our time, planet-wide in scope and aspiration, unstoppable, all-encompassing and yet diffuse in its effects, maddeningly difficult to conceptualize and yet omnipresent in the details of our daily consumption, production, travel, leisure, entertainment, education, and communication, and so impossible to ignore. It is a process about which many of the world's educated, broadly comfortable bourgeoisie, no matter where we live or work,(3) feel profoundly ambivalent. This ambivalence today fills the pages of newspapers in their coverage of globalization, fills reporting on globalization by television and radio, fills intellectual and learned journals debating globalization's impact, fills the shelves of books published each year on the global markets. It is a constant source of debate and unease.

    Microcredit, this Article suggests, is a global economic practice that seeks, on the one hand, to overcome this fundamental ambivalence about globalizing markets by making them available globally, universally, across the income ladder. On the other hand, according to this Article, the practice of microcredit reproduces an analogue of this ambivalence toward globalizing markets, particularly visible in microcredit's own highly ambivalent application of markets and market principles in international development work with the world's poor.

    The fundamental ambivalence toward globalizing markets is stated easily enough in the abstract. On the one hand, we recognize and are attracted by the efficiencies of global markets. On the other hand, we fear the insecurity that we suspect genuinely global markets might produce--markets in which goods and capital flow globally but in which labor is relatively immobile and in which we desire labor to be relatively immobile in order to maintain social and cultural stability at home. And we fear also for others, the poor of the world. We fear for them that global markets might not prove a net benefit and, indeed, in the case of the world's very poorest, might simply leave them out altogether. While recognizing the benefits of globalizing markets, we also recognize, in one matter or another, one sector or another, with respect to one population or another, the possibility of market failure. Yes, of course, we have heard the panglossian arguments that all of us cannot help but benefit from global markets in the long term, but those arguments appear to us, frankly, a little too grounded in waiting for a long term that appears to be ever receding from the present, rather than in concrete experience, to be entirely reassuring. The possibility of market failure, in some matters or for some people, seems to us a distinctly live possibility. Hence we both want economic globalization and fear it.

    What has microcredit to do with this? In the first place, microcredit works with the world's poor. If it also exhibits, as this Article suggests it does, a profound ambivalence about globalization--its mechanisms, processes, and outcomes--it does so in the context of the poor and not merely in the context of us, the world's bourgeoisie. More precisely, microcredit, because it is a development activity seeking to bring assistance from the haves to the have-nots, constitutes a point of intersection between the world's bourgeoisie and the world's poor. Microcredit therefore allows us to better understand the tensions generated by economic globalization, by providing a social space that is not limited by the experiences of the rich or of the poor but is instead shared between them.

    Moreover, microcredit utilizes market mechanisms to achieve its development aims. As we shall explore in some detail, the distinguishing feature and fundamental appeal of microcredit is that it explicitly uses market incentives to create a credit market for the poor, a market characterized by two features: readily available funds and repayment requirements. We shall also have to consider in what ways and to what extent microcredit, through the extension of credit and the creation of enforcement disciplines for its repayment, has in fact embraced market mechanisms or has in fact elaborated other disciplinary mechanisms. At the outset, however, it can be said that microcredit's embrace of market mechanisms appears sufficient to show that microcredit shares with economic globalization a broad commitment to the principles of markets. This would suffice to make microcredit an important activity by which to understand the claims advanced on behalf of economic globalization, especially the claims made by many that markets advance the interests of everyone, including those of the world's poor. Yet that fact would not be enough to show that understanding microcredit contributes to an understanding of the ambivalence felt about the global market; if the intellectual framework of microcredit were nothing more than an endorsement of markets, no ambivalence would arise. An intellectual paradigm that simply endorses market logic generates no tension over global markets.

    Microcredit is, however, more complicated than that. As an intellectual framework for international development, microcredit is deeply ambivalent as to whether microcredit represents the extension of markets, including global markets, to the world's very poor or rather an attempt to create faux markets for the poor, markets artificially created and maintained through subsidies, to remedy the global market's failure with respect to the poor and their needs. Both as an intellectual framework and as a concrete practice, through the many thousands of organizations and agencies worldwide that utilize its methodologies, microcredit exhibits deep ambivalence as to which of these possibilities most accurately depicts the relationship of economic globalization to the world's poor. It is an ambivalence, moreover, that is not merely conceptual but is also reflected in the culture of the international microcredit community--the loose groupings of nongovernmental organizations (NGOs) and governmental and international agencies that support microcredit. Parts of that community tend toward the view that microcredit is an extension of real markets downwards into the ranks of the poor; other parts tend toward the view that microcredit is the creation of alternative markets for those left out by the real markets; and still other parts move back and forth between these views according to case and circumstance. This ambivalence within the microcredit community and its practitioners has cognates in the ambivalence felt among the world's bourgeoisie toward the spread of the global market, and in particular toward the question of whether economic globalization in fact benefits and includes everyone.

    At issue, however--what this Article hopes to illuminate through the examination of microcredit and its attitudes toward the market--is not economic globalization as such, but rather the morality of economic globalization and the morality of microcredit. That economic globalization has a morality, or at least that it is understood by some proponents as having a morality, might seem like a strange idea. After all, one of the constant themes of many of economic globalization's proponents, as we shall see, is that globalization is inevitable and that, therefore, the only relevant task is to accommodate ourselves to that fact. If that is the case, then discussion of the morality (whether a good morality or bad, defensible or indefensible) of economic globalization would seem rather beside the point. Yet the discussion surrounding globalization has been, on the contrary, filled with moralizing, and a large amount of it by proponents of economic globalization. It is not the case, as we shall see, that the debate over economic globalization is between proponents who shrug and say, "It is here, get used to it," and opponents arguing from moral grounds. On the contrary, to judge by the literature on economic globalization, it is a matter of intense importance to many proponents of the global market that it be seen not merely to be the inevitable, unstoppable, coming train of the planet's economic future, but to be the world's economic system as a matter of the right and the good.

    The needs of the world's poorest people have a particular place within the morality proclaimed with some frequency on behalf of economic globalization. It might have been the case that the needs of the world's poor would not be considered decisive in judging the moral worthiness of a global economic system. After all, the versions of utilitarianism that lend themselves most readily to the usual economic models of maximal satisfaction of wants do not necessarily contain special criteria addressing the needs of the worst off. Nor would it be obviously iniquitous to suggest that a planetary economic system, whether global capitalism or anything else, ought to be considered a success if it maximizes the satisfaction of wants among most...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT