Microfinancing Leads to Nobel Peace Prize

I first mentioned microfinancing in July 2003, in a blog post titled Without the State, But Not For Long. In that post, I noted that the New York Times was banging the drum for more state control of those institutions and individuals who put up monies to lend to the poorest of the poor, rather than recognizing the benefit such programs offer without the state sticking its nose into the equation.

Today, I read that Muhammad Yunus and the Bangledesh Grameen Bank have been awarded a Nobel Peace Prize for spearheading microfinancing.

In the article reporting this development, it is interesting to note the reasoning for the Nobel committee’s awarding of this prize.

"Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development,” the secretive five-member committee said in announcing the award.

Did you catch the importance of the words in that statement?  "Across cultures and civilizations...” “...even the poorest of the poor can work to bring about their own development,..."

It’s not the nanny state, and its constant intervention, that brings about individual and societal development, it is capitalism, the free exchange of goods and services between business owners and individuals.

Even those who are held out to us as the “poorest of the poor” can raise themselves up if given the opportunity to create a viable business, via microfinancing loans, rather than simply receiving handouts from the state, along with a sympathetic pat on the head.

UPDATE: The New York Times piece, written by Celia W. Dugger, which notes Muhammad Yunus’ capture of the Nobel Peace Prize, is a bit more positive than the piece they wrote on microfinancing in July 2003.  The piece is titled Peace Prize to Pioneer of Loans to Poor No Bank Would Touch. The NYT’s piece from July 2003 can be read here.

Posted by on 10/13 at 08:48 AM

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