Defining Wealth for those in Extreme Poverty

Every two weeks I have a conference call with a group of friends to discuss a new and creative design of an ideal political economy in today’s day and age. There are four of us: one in New York, one in San Francisco, one in Atlanta, and myself in Columbus. We give ourselves some homework between each call so that we’re able to come armed with a few thoughts on a topic of our choosing. It’s totally fascinating each time we talk, as is the build-up to the conversation, which includes some writing by each of us on the topic at hand.

So far we’ve done about 6 book reports and had focused discussions on spirituality, education, tax structure, and monetary policy. Next discussion is on energy.

As with everything else in my life, I find that my experiences with Nuru deeply inform every contribution I make to these discussions. It doesn’t hurt that Matt Stillman is one of our team-mates in the discussion. He knows a ton and can talk and talk about the end of extreme poverty from a policy perspective, which is a pretty important perspective.

Today’s discussion about monetary policy had me thinking, as usual, about the folks in Kuria whom Nuru works for. We were discussing the nature of wealth and how wealth is is different from currency is. It was kind of blowing my mind on both ends.

See, wealth, as Matt was defining it, is access to resources. It’s not currency. It’s much easier to understand if you think of the folks in Kuria. A couple of years ago, essentially no amount of paper money, for the average farmer in Kuria, would have given him or her access to high yields of maize. This is because the community members lacked the training and access to the resources of good seeds and fertilizer. So, wealth is access. By increasing the access in the community, it has increased its own wealth.

On the other end, what is currency? Well, currency is paper money, or at least it was few decades ago. Before that it was coins, but now, in developed countries, it’s pretty much a list of numbers on a screen. I, as a citizen in a developed country, rarely see any of the currency that is supposedly in my possession. I see numbers on a screen. Mifos and M-PESA and the work of our CED and Agriculture programs are helping to facilitate this evolution from paper money to numbers on a screen for the folks in Kuria.

When transactions are easy, secure, automatic, and technologically advanced, more exchanges can occur, markets can grow, access to resources can grow, and well, so can wealth! Exciting.

Oh, here’s a great video on M-PESA and it’s growing influence in Kenya (h/t: Stephanie Jayne (ha! That’s my first use of “h/t” , I feel like a real blogger)): CGAP

Alright, my blog post is essentially one big long side-note today. Next week, I’ll update you on what’s happening on the Research Team! You’ll get two weeks worth of news.