° Economics, market forces, financial cycles:These topics are not likekly to elicit a passionate response. They 're necessary topic's, but they're not really much fun. And they are certainly not buzzwords among people who want to change the world. We are passionate about issues of justice, service, poverty, slavery, education, healthcare, and clean water.
But if we really want to make a sustainable impact on any issues in the United States or internationally, then we simply must grow in our understanding of economics, market forces, and financial cycles.
I remember the first time I realized that my "help" was insufficient at best , and actually could be harming the people I was trying to assist.
While living in Rwanda, I met Jean, a survivor of the 1994 Rwanda genocide. Soon after the genocide, he had begun to rebuild his life, starting a poultry business that provided eggs to his community. His business thrived for a time - until church in Georgia "adopted" his village as a part of its crusade to help victims of the genoicide, providing food, clothes, and free eggs imported from neighboring village.
With this new surplus, Jean's egg business failed.
No matter how good a business plan might be, it is nearly impossible to compete with a free or heavily subsidized product. Jean was forced to sell his most productive assets, his chickens , and look for other employement.
A year later, the church left the village to support other individuals struck by disaster. With no local supplier of eggs, the village had to import them at a higher price than Jean had charged originally. At first, giving away free eggs had seemed like a great solution: the community was poor, the american church was rich, and, for a time, the community was well fed. In the long-term , though, their efforts were not sustainable and, ultimately, Jean and other community members were negatively impacted.
The church had a vision to improve the lives of those in a poor community, the passion to set the groundwork for change, and the drive to implement their vision. So WHAT WENT WRONG ?
For most of my life, I thought that if people are hungry, the best thing we can do is to give them our excess food. If people are thirsty, let's imported water. If people needs clothes, we should empty our closets for charity. If people are caught in slavery, let's purchase them and set them free.
But I missed the bigger picture : these are all temporary and ultimately dissatisfyng fixes.
People will be hungry tomorrow. Clothes will wear out and needed to be replaced. Chains of dependency will slowly strangle aspirations and dreams.
Disincentives for productivity will undermine long-term progress.
With SHORT-TERM solutions, people will always have the same needs a short term later.
It is becoming clear that intervention in market forces is not as straightforward as we might immagine to have a greater likelihood of improving the extreme poverty and injustices in our world , we desperately need an understanding of BUSINESS CYCLES AND MARKETS.°
A very good analysis of Business cycles by Peter Greer , "FOREWORD" in " Boom and bust, financial cycles and human prosperity" Alex J. Pollock , AEI Press 2011.
