Physics of Poverty: The Decade of the Cow

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Physics of Poverty series by Dr. Tara Thiagarajan, chairperson, Madura Microfinance Ltd.

According to the microfinance calendar, the last ten years were the decade of the cow. We celebrated the cow as the path out of poverty. At Madura, we even benchmarked the loan amount to the cost of a cow. What good is a loan if it’s not even enough to buy a cow? And so over the last decade, the microfinance industry has supported the purchase of millions of cows across the country. Millions of scrawny cows with poor yield it turns out; a hallmark of the inefficiency of microenterprise. I for one am glad to be past the decade of the cow and am excited and hopeful that this decade we will do away with celebrating cows – and pigs and goats and chickens and antiquated sewing machines and cottage industries – and celebrate instead the human being and its capacity for extraordinary innovation.

India has been built on a romanticised notion that small is beautiful. The spinning wheel became the symbol of a self-reliant India. Each of us independent, spinning our own yarn and milking our own cow. Yet such self-reliant independence is the very antithesis of progress. By the time we have each woken up, milked the cow, cleaned the cowshed, and sat down to spin enough yarn just so that we can finally make one new set of clothing to replace the one that is fraying, the light is fading. It’s time to cook and eat dinner and go to bed so we can wake up and start the routine again. No time for anything else. No time to think.

Progress is about interdependence and not independence. It is about the ability to organize ourselves into groups to accomplish more than any one of us could on our own. It is about each of us specializing in our knowledge and function and coming together to create something more than the sum of the parts. We lose our self-sufficiency, our ability to survive independently in the woods. But we gain by being part of something bigger, something extraordinary. It’s not so different from life itself – from self-reliant single celled ‘micro’ organisms like bacteria have evolved aggregates of cells with specialized function that together make organisms of extraordinary capability. The cells of the organism cannot survive on their own very well, but they play a part in something much more significant.

A hallmark of poverty is a lack of functional specialization and organization. Poverty is largely characterized by people engaged in self-reliant, independent methods of livelihood where cooperation and organization rarely extends beyond the immediate family. It is characterized by people engaged in enterprise that requires little specialized knowledge and is therefore easy to replicate. It is characterized by people engaged in enterprise too small or ‘micro’ to enjoy economies of scale. Indeed, even biological organisms gain efficiency with scale, larger organisms require less metabolic energy per unit mass than smaller ones. Most significantly however, is that the backbreaking effort of self-reliance leaves little time for innovation. And so also it is only larger organisms with cells specialized into organs that have the capacity for thought.

In the new modern India, we are slowly shedding our Gandhian ideals of self-reliance and scale has become the mantra. I applaud this. However, our view of scale has been unidirectional. Large urban corporations serving the poor masses. Yet when these urban corporates constitute such a small fraction of the population it is horribly limiting in its scope. What if instead we could find mechanisms that catalyze functional specialization and organization among the hundreds of millions of individual cow keepers? Maybe then larger organizations will begin to emerge from the most surprising places and in numbers we could never before fathom. Tall order you might think, but I am convinced that with our understanding of how large-scale interconnected systems function, together we might just be able to crack this. More about this to come in the following weeks.

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