Book review: The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits, by CK Prahalad.

“What are we doing about the poorest people around the world? Why is it that with all our technology, managerial know-how, and investment capacity, we are unable to make even a minor contribution to the problem of pervasive global poverty and disenfranchisement? Why can’t we create inclusive capitalism?”

With opening challenges like this, Mr Prahalad’s book really grabs one’s attention. “If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up,” Mr. Prahalad goes on to state.

Constant innovation
University of Michigan Business School professor CK Prahalad challenges the common beliefs held by business about the world’s poor and introduces us to the Bottom of the Pyramid (BOP), an underserved market of more than four billion people. This is the market companies should be paying attention to, he says.

According to Prahalad, the poor need to seen as a market, but one different from the conventional wisdom. When this happens traditional business concepts are applied to each situation from its distinct perspective. What results are practical, innovative solutions to unresolved problems.

Prahalad demonstrates that making products more affordable to the world’s poor can provide substantial returns to create real partnerships and innovations for established companies.

One may question the realism of Prahalad’s vision and goals. As Prahalad readily admits, “We have a long way to go before the social transformation of inequalities around the world will be accomplished.” But being a long way from reaching that goal should not be a deterrent to working towards it.

Slowing growth and financial crises in overserved markets may mean companies have no other option than to enter these Bottom of the Pyramid markets. When you do, you’ll find it a win:win for your business, and an opportunity to demonstrate your faith in action.

God cares for the people at the bottom of the pyramid; and He’s placed you in a position of influence to help. In what way will you use the grace and mercy freely given to you to build the Kingdom of God in their lives? to advance their social and spiritual transformation? What about using it to innovate products and services for Bottom of the Pyramid markets?

Book review: The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, by Hernando de Soto.

“Sendero Luminoso!” A name that struck so much fear in the hearts of Peruvians in the 80’s that they uttered it only in a whisper. Yet of all the terrorist movements since World War II that had any realistic potential to form a national government, only this one was decisively defeated on the battleground of ideas.

Not poor, but underserved
The task of making The Shining Path politically irrelevant was accomplished primarily by ideological means. Hernando de Soto, of The Institute of Liberty and Democracy in Lima, offered an alternative vision of Peru’s poor. Rather than see them as the proletariat, he showed that they were in fact budding entrepreneurs whose greatest desire was not to bring down the market economy but to join it.

“Capitalism can be the engine by which the poor, set free in an open market place, can raise themselves from poverty. We must give them the tools. We ignore them at our peril”
—Hernando de Soto

There’s a mass movement of people to the cities. They seek to cluster together so that they can divide labour among themselves to become more productive. This is probably the very same reason your family came to towns and cities many years ago.

There are 4.5-billion of people categorized as ‘poor’, who hold an estimated $9.3-trillion in assets. They want the same things as us — homes, work, structures from which they can trade, schools, shops. They’ve seen these things on TV; they’ve read about them in the press, they’ve watched how we live.

Changing ideologies
Yet they can’t have these things because the legal systems upon which we rely are too unfriendly to them. It takes 11 years in Egypt, for example, to gain title to land a home has been erected on. These people are underserved rather than poor. De Soto predicts they will bring down our systems as many times as they need until they feel included, not excluded.

Consider the ‘poor’ for a moment. Do they lack entrepreneurial spirit? Do they lack a market orientation? Is something the matter with them? Does God not love them? Does God not want to prosper them? Might God help them change our ideology of exclusion? our comfort in materialism?

Is God in the ideology-changing business? We all know these Bible stories very well. Consider the Genesis account of Joseph: A dream; an interpretation. God’s servant put in a high place to establish a plan of salvation for His chosen people.

Seven years of plenty, Egypt storing up a surplus of grain under Joseph’s guidance. Then seven years of famine and Joseph opens the store houses of Egypt and sells grain to the Egyptians, and to all other countries. When the money is all gone, the people trade their livestock for food, and then when the livestock all belongs to Pharaoh, the people sell the only things they have left: their land and themselves.

So, at this point all the money, livestock, land, and labour — the entire wealth of the region — is in one person’s hands. Can you imagine the extent of that transfer of wealth?

Four hundred years later the Israelites have prospered in Egypt and filled the land. A new Pharaoh heads the nation who did not even know about Joseph. The people of God cry out in anguish and pain. Exodus tells us that God hears their cries and answers: “The LORD said, “I have indeed seen the misery of my people in Egypt. I have heard them crying out because of their slave drivers, and I am concerned about their suffering. So I have come down to rescue them from the hand of the Egyptians and to bring them up out of that land into a good and spacious land, a land flowing with milk and honey—the home of the Canaanites, Hittites, Amorites, Perizzites, Hivites and Jebusites. And now the cry of the Israelites has reached me, and I have seen the way the Egyptians are oppressing them. So now, go. I am sending you to Pharaoh to bring my people the Israelites out of Egypt.””

Moses agrees to go back to Egypt, but Pharaoh’s heart is hard. The plagues are sent: Blood, frogs, gnats, flies, livestock, boils, hail, locusts, darkness. Then the one that seems impossible to bear: God kills the entire first born of the Egyptians; those under the Passover are spared.

Pharaoh relents and gives the Israelites passage, and the Egyptians are so happy to see them go they give them all their treasures. Imagine the ideological change in Egypt post-exodus. Imagine how much wealth was carried off in the Israelites’ hands — enough to build a new nation. Imagine the lack of productivity left behind in Egypt once their labour had gone.

God is in the business of changing ideologies, but what does it take? What does it take to change an ideology? Are ideologies being changed now? Who are some of the social entrepreneurs that are changing ideologies in our day? What are their motivations? Are they establishing ideologies of man, or of God?

We have Jesus
There will not be another Joseph, Moses or David. We have Jesus, who has given us gifts and prepared good works of service for us to do, and then to stand. Jesus is all we need to occupy our world for the Kingdom of God. Remember, the Kingdom of God is like a mustard seed — small beginnings, large result; like yeast — little ingredients, large impact.

To stand means to occupy, to hold the high ground, to advance the Kingdom of God ideology, not the ideologies of man. This Kingdom of God ideology is not a ‘Kingdom now’ ideology, it’s not a ‘name it and claim it’ ideology; it has gone beyond an economic and capital ideology. It is a nation-building ideology.

Are we rich in ways that do not count, and poor in ways that do?
Please take a moment to ask yourself, “What can I do to implement the ideology of God?”

Would your perceptions change if you thought of people rather as underserved than poor? As more and more people pour into towns and cities from rural areas, how included do you make them feel? in our markets? in our churches? in our homes? in the gospel? in the Kingdom of God?