Leah Wald surfs, races horses and plays soccer. She traveled to a former FMLN guerilla base in El Salvador to help build an eco-tourism business. Later, she founded a company that exports cashmere from Mongolia and reinvests its profits into various development projects. She studied International Political Economy and is currently getting a business degree at IE Business School.
A question I am often asked is- why do it? To this, I ask right back- why don’t you?
Our generation is one of leaders, adept in the workings of technological innovation, and with a moral global understanding of the problems facing our world, our respective countries, and our own persons. Our young generation has changed our collective consciousness from the dusty one present in our parents’ generation to one where a successful business is interested in not one, but two bottom lines.
Given that each country has a diverse social economic climate to operate business and trade in, it is imperative that we learn to conduct business in their trading communities in a manner that positively enhances the partner’s well being and leads to self-sustainability. We have expanded our business approach towards enterprises’ profits that expand the conventional view of a simple bottom-line to encompassing an equation including a positive social impact. Businesses who conduct themselves under with these principles are searching to not simply take from the communities and environments in which they operate in; but also positively give back to these societies in a sustainable manner. In a pure capitalistic view, the negatives may be apparent as a loss of profit because capital is oft allocated in new sunken ways. However, the positive impacts are as indispensable as a company’s regular bottom-line and both should be considered under the same introspective light. Moreover, from the stance of a CEO, the small loss of profits constitute an enormous social gain that can make their company more competitive and in the long run, more profitable.
Patterns of liberalized trade across the world demonstrate the uplifting effect that open markets can have on human welfare however correctives need to be in place that convert free trade into fair trade. Such a fair trade system would provide equal access to markets and more balanced workplace conditions, compensation, and managerial autonomy to all actors involved. Adam Smith’s argument, contending that free trade eventually leads to the economic enhancement of all actors, must be modified to the meet the conditions of exploitation present in the modern world.
Free economic exchanges between nations are still leading to their economic betterment, however one question must be asked regarding the validity and necessity of unfettered free-market models- at what cost? Social losses, political losses, and economic losses— such are the consequences from efforts to emphasize gains taken from the current system of global trade. In a country’s development process, the nation must question themselves if they are willing to suffer the losses necessary in procuring their desired political and economic goals. Let us modify international trade from its current form into a positive- sum game, in which trade rules do, in fact, benefit all of those engaged in trade equally.
“Economic considerations are merely those by which we reconcile and adjust our different purposes, none of which, in the last resort, are economic.” -Freidrich Hayek
As a student of Political Economics, initially, I naively believed that the value proposition of development programs were held strictly in economic terms. Now, I know that questions related to productivity, utilization of resources, politics and partnerships with government entities can not simply be solved through graphs and data regressions. On a microeconomic level, the apex of economic development is at the integral nature of psychological empowerment.
The process of political and social development starts from the individual in his or her quest for livelihood betterment. It is the desire for change that exists within the grassroots population that is the catalyst factor in development for developing countries. How to further harness this potential? 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 (Prahalad, 2006).
Amartya Sen was the first to spell out a new definition of poverty. He explained that poverty is seen merely through the standard criterion of low incomes however, poverty should be seen as the deprivation of basic capabilities. There is a great divide in substantive freedom for individuals around the world living in villages that they have the capabilities to better their socioeconomic situation.
Today, all liberal economic phenomena, once quite obscure, have become commonplace and enlarged across the international arena, providing incentives to all countries to follow the path of globalization with the goal of eventually integrating the world’s economies peacefully. However, this process presents a heavy double standard: nations are arresting themselves to the rules of playing international economic games that are supposed to enhance the livelihood of developing nations, while constantly maintaining an egocentric view in mind. This reality begs the question: is it possible to trade freely and fairly while maintaining a state-centered economic plan?
Karl Marx wrote on the importance of “replacing the domination of circumstances and chance over individuals by the domination of individuals over chance and circumstances.” The epitome of development lies within procuring personal ambition within the impoverished populace. From my vantage point, I find that the study of development is truly the study of individuals. When citizens harbor a desire to better their socioeconomic situation we need to assist them in creating a plan that will carry out these changes. Individuals must feel the power to control their own lives and their own futures. We should work to assure that individuals have the opportunity to feel confident and proud of themselves and their consequent capabilities and contributions in life.