Wealth is created one person at a time

Many people I know are passionate about eradicating poverty. Out of all the ailments that humans suffer from, poverty is one of the cruelest and dehumanizing situations that one can find one self in. Poverty is not defined by how many dollars you have to live on every day, it is not defined by what percentage of income you are below. Poverty is lack of options; it is that simple.

The problem with our political class today is that they build these amazing projects to help poor people, organizations like the UN, the Worldbank, and countless NGO’s create these projects that supposedly will help the people with the fewest options in the world. They are spending millions and millions of dollars and failing miserably.

The Grameen Foundation, with their micro loans and micro utility systems has understood that wealth is created at the individual level. If you help people get credit, so they can do the investments needed to expand their livelihood, their lives will change. Grameen got the Nobel Prize in 2007 for this insight.

Someone else who has understood this is a guy named Paul Polak. After years of being a psychologist, he found that alleviating financial troubles had a profound effect on alleviating their mental illnesses. A trip to Bangladesh inspired him to start up International Development Enterprises, a non-profit that helps adapt modern farming technologies to small rural farms and helps build micro economies and local markets.

In the last 25 years, Paul Polak has helped individuals in the poorest rural communities around the world increase their income by $200 million. No government-to-government program can claim such a success. Polak wrote about his work and his method in a book called Out of Poverty, that was published recently, and you can also learn more about his work by listening to the NPR interview with him.