Michael Moore ignores that capitalism relieves poverty

Michael Moore’s new film, “Capitalism: A Love Story,” boldly asserts that capitalism is evil. The film even features several priests that call capitalism anti-Christian for failing to protect the poor. Au contraire: I have spent my whole life as a dedicated member of the church, and I am currently using the power of capitalism to serve the poor.

Capitalism is simply an economic instrument that can be used for good or evil depending upon the desires of the captain at the helm. While in many traditional enterprises shareholders’ interests are paramount even above the interests of customers and employees, social entrepreneurship is changing that thinking. It’s possible to serve the poor and make a reasonable profit at the same time.

During the past year, I went to the far reaches of Pakistan, India and Kenya to explore how business can serve the poor. While in Pakistan, I joined Micro Drip, a new venture that increases poor farmers’ income through higher crop yields and lower input costs.

Micro Drip has successfully reduced the cost of drip irrigation to about a fifth of its normal cost, so now the technology is accessible to poor farmers. By having poor customers at the forefront, Micro Drip and other social enterprises like it are forced to innovate in product design, marketing and distribution.

For me, the power of capitalism lies in the fact that rich and poor alike can actually harness market forces. Take Mohammed Ishmail, a farmer with 11 acres in southern Pakistan who doesn’t need a broker to diversify his portfolio. Like his counterparts in the developed world who invest in various types of stocks and bonds in order to spread the risk of their portfolios, Mohammed does not put all his eggs in one basket.

During the summer season, he plants 10 acres of cotton, a crop with minimal price volatility, and 1 acre of onions, a crop that is notorious for huge price fluctuations. The price of onions can fluctuate between PKR 250 to 7,500 per kilogram ($3 to $90). Mohammed sees this as an opportunity to hit the jackpot. According to him, during a 10-year period he will hit the jackpot five to six times. Not bad odds.

I also met Zulfiqar Ali, a farmer with 4 acres in the small village of Dabri. He cannot travel to the nearest bank branch, which is miles away, when he needs some cash. But, all he has to do is open the door to a room where he stores his wheat crop and travel to the local market.

Unlike most farmers in Pakistan, Zulfiqar does not sell his crop upon harvest. He realized that harvest season was the worst time to sell due to a glut in supply. Zulfiqar stores his wheat crop and sells it one bag at a time, based upon when he needs cash. With each passing week, the value of his remaining wheat increases. Zulfiqar uses the market to his advantage.
 
Capitalism is not perfect, as Moore so aptly details, but it certainly is not evil. It can be used to serve the poor and actually result in innovations that can trickle up and improve our own lives in the developed world.
 
Joel Montgomery recently completed a yearlong fellowship with Acumen Fund, an innovative nonprofit that utilizes market-based solutions to tackle some of the most critical social issues in the world. He stars in the upcoming film “The New Recruits.”

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