Poverty, Politics and Purpose

[20 minute read]
Disclaimer: this is an iterative post–will openly draft, revise, and update over time.

Technology without politics will never solve poverty. That’s the thesis to Hamilton Nolan’s opinion piece: “Poverty Doesn’t Need Technology, it Needs Politics” by
[original link: http://theconcourse.deadspin.com/poverty-doesnt-need-technology-it-needs-politics-1789520902 ]. There’s more than the tech industry in the U.S. that can create tremendous change, and while people in poverty sometimes do have access to technology, it’s rare to find substantive opportunities in communities where poverty exists.

Meanwhile, brick and mortar stores, and mundane services we rarely see paraded in the media continue to run, and people still need to take care of their day to day basics. What Nolan claims we need in his article is politics, as he views it consciousness to explicitly manifest beneficial changes to problems like wealth inequality that affect more than the what a business was designed to do on its own. There’s also more to the poverty than simple “wealth distribution” on face–where most people might assume it means redistributing wealth through taxation–as the sole starting point to solving poverty. We also need to make wealth creation a more inclusive endeavor.

I believe it also means we need to reframe how we think of entrepreneurship, business, and charity–how it happens and who we envision as entrepreneurs, and what the limits to charity are–in order to address genuine impacts in working to significant local and world problems like poverty or climate change.

This requires a sense of conscience and coordination in and among businesses that’s informed by shared purpose and awareness about a business’s role in industry can also be a hinge to deep issues in society.

Why Technology Won’t Solve Poverty by Itself
If I were to make a sympathetic guess about the raw assumption for what tech entrepreneurship conferences studded with Silicon Valley superstars and hackathons designed to “disrupt poverty” are based on it’s this:

Any economic mobility that emerges from a business can be a transformative step for uplifting individuals out of cycles of poverty. That’s a broad but valid starting point.

But what makes the tech industry so special in the economic development/poverty halting conversations that I tend to hear?

Tech attracts everyday people, investors, and policy makers alike because it lends itself to scalability and visible success stories. In what seems like an instant, you can reach millions of people on youtube or facebook, without spending much money, if you know how to make and access the right advertising.

Technology is fast, lucrative, and often easy to see as an industry. Its results get paraded along with larger-than-life personalities who are then praised by the media for their daring and subsequent wealth.
The same line of reasoning applies to why countries might welcome foreign businesses looking to “exploit” emerging markets in the name of economic development–consider China 20-30 years ago welcoming U.S. commerce, people considering countries like Vietnam today. Similarly, this is how some might see plus sides to speculation in the gentrification debate in major cities like Chicago, San Francisco, New York, Pittsburgh, or Detroit. There’s a degree of truth to being the first to provide desired goods or services in a place that does not yet have access to them yet. Sometimes, it also does a lot to give people economic & social mobility.

Being able to have a well-paying labor job and moving up into different areas of education and business sometimes happens, but but it’s becoming rare and if studies from 2014 and 2016 are correct, people are starting and staying relatively poor (The Atlantic reports this in 2016 [I need to finish reading the primary source academic article, will update when I can get closer to it]). The increase in jobs we might be seeing don’t equate to upward career mobility, if anything career mobility points downward (as observed in a 2014 study of the United Kingdom according to The Guardian [this was a study conducted by sociologists, I’ve yet to read the primary academic study, will update when I can get closer to it]). The evidence suggests an opportunity for wealth (or even basic employment) will not readily connect employees to the higher echelons of career growth.

Another Kind of Entrepreneurship [Still] Happening
Technology won’t solve the fact that some people have unfair advantages or narrow interests in their business.

Understood as a fact of reality, that’s not necessarily bad. But in the big picture it does happen that the “market” misses out on other genuine needs which may never get addressed, and what we choose to value–socially,  economically, or existentially–will always influence the kinds of solutions we’re willing to see and create.

In most cases, when someone can associate widespread need with a business opportunity it’s easy to associate the potential for wealth with potential for economic impact.
But they’re not the same thing.

Lots of businesses that aren’t powered by smart phones or big data still exist and still need attention. Whole chunks of the U.S. remain about 30 years behind metropolitan centers in technology use, and many of the needed businesses in those communities will never be visited by a Silicon Valley company.

It’s easy to forget that a significant sum of businesses still make the backbone of most communities in the U.S. are small to medium sized businesses that we probably take for granted or forget about.

An immigrant Korean-American family opening a dry cleaner.
A Black family opening a small produce market in a neighborhood of Detroit far from downtown.
The electrician in Southeast Michigan’s downriver labor communities.
The family-owned lift and hauling business in rural Pennsylvania.
My friend who’s creating a powerwashing/yard cleaning business.

All of them count as entrepreneurs and have businesses that can meet some kind of need without relying on apps at this time.

I think the Hamilton’s premise for critique is in the right place (in case you still haven’t read it yet, see “Poverty Doesn’t Need Technology, it Needs Politics”)–especially considering context and dominant themes we live with and are able to see:
We know some people get very wealthy for unfair reasons (monopolistic/predatory businesses, speculative investors, land grabs through closed-door deals, etc.).
I’ve also witnessed most people struggling even with honest hard work and doing what they can to work intelligently–it’s wealth stratification–and the ties between systemic injustice and perpetuated cycles of poverty.

In Detroit, several long-time community residents & property owners who took care of their own properties and are looking to expand by purchasing land for sale by the city are still unable to do so while major business barons like Dan Gilbert and John Hantz are often able to negotiate inexpensive purchases (in Hantz’s case, land bought by eight cents per square foot and sold at $300 per plot).

Looking at the U.S. financial crisis of 2008, many taxpayers would be justified for feeling angry that major banks and their executives were not held accountable or pressed with criminal charges. Instead, the banks were bailed out with taxpayer money, and later the U.S. government was sued by many of the same banks that received government assistance. This kind of support and exemption wasn’t available to emerging entrepreneurs, smaller businesses, or the employees who were laid off.

A moment’s tangent to address exceptions for “fair wealth creation”
I personally think there are ways to creating and attaining extreme wealth that exist independent of systemic exploitation. Knowing how to scale through online commerce might be a way that people can legitimately earn something without exploiting anyone in particular–you can sell an app that makes advertising less intrusive for example.

That said, I’ve yet to make it work and I believe for most people it rarely happens because the tools for creating a viable high-growth business must be met with:
1) decent preparation
This includes learning, focused hard work, and the ability to maintain your focus on the work without getting distracted by competing priorities like basic needs, family, etc. or outright having to fend off/live under oppressive influences
2) earned or inherited relationships
It takes time, learning, and effort to cultivate good relationships and the integrity to establish and maintain a solid reputation
and
3) lucky and/or carefully facilitated opportunities that work in your favor
For example, you might need to be able to recognize a big problem that affects others (potential clients/customers) exists in advance, or happen to have a working solution ready in time for disasters or the latest breakthrough (i.e. imagine the folks who first recognized the potential for smart phones).

I also believe where you are and the people you grew up with have a role in shaping the kinds of opportunities you’re able to recognize.

Some advocates will often ambiguously refer to these as “privileges” or in other words which for the sake of clarity I’ll define in a way that includes privileges that are unearned and earned.

Even in the place I live now, I was stunned to find people who are almost a decade younger coaching each other to “never take an internship that’s not paid your worth”–the context to their conversation was that one woman had applied to several internships, almost all of them were paid. Here’s what’s stunning about this:
1) I and many other people I know were initially under the impression that having an offer for experience is good, and if there’s a paid opportunity, just go for that
of course we suspected something was unfair–I went to a commuter campus, and had to pay tuition for the credit hours counted by the internship. If it’s an unpaid internship, that means you’re literally paying to work more.
At the same time, someone in my family had recently lost their job due to the recession, and anxieties about the economy were palpable throughout the U.S.
2) The conversation between the two took for granted that they were already in a position to choose from multiple potential employers, and
3) The kind of coaching comes from a very specific environment–many people have trouble bridging what they need with their ability to confidently ask. It’s something I am personally working on doing with grace.

Ujima & Ujaama: Politics in a Philosophical Sense and Business with Bigger Purpose
Politics is the articulation of desired action–it sometimes involves explicit and tangible actions, but more often than not it’s about people talking about things that they want or believe.

I’m not a fan of this, but we know politics are important. Articulating a desired action creates the possibility for design–creativity with intention–as Cornelius Harris (one of the first creators of techno music from Detroit) would say in his casual wisdom. This means we can then design potential solutions to meet fundamental needs.

As long as it’s operating, a business will (hopefully) always be creating something. What matters is that in the broader scope, the business and people working in do so with a sense of responsibility that makes relationships clear to other organizations and actions that are intended to meet the needs of people in a specific place–a community. For those who unfamiliar with the holiday Kwanzaa, this is approximately what the principle Ujima highlights: collective work and responsibility. While Ujima is often focused on a very close community and family, the idea applies well to organizations too.

Concidentally, Kwanzaa also celebrates a principle called Ujaama: cooperative economics (for a few perspectives on what it means: in depth 1, in brief 2, in brief 3).

In this sense, recognizing that a business can exist as part of a broader intention is essential to the idea that we need to create businesses that are part of real communities–whether directly connected to physical neighborhoods or abstractly connected to other entities that can influence a cause.

Even if the business has a very narrow focus, it’s possible for its employees, leadership, customers and stakeholders (people affected by the organization even if they’re not customers) to recognize how it serves a role in the bigger picture.

Maybe it specifically creates bearings for an automotive supplier. Then it has a role in transportation and the broader arc of transit accessibility in its multitude (aka transit justice). Or the business creates fight gear for women, it can focus its existential responsibility as an enterprise on fitness and/or women’s empowerment as we see with Society Nine. Of course a company like Society Nine wasn’t built to give every woman a solution for fitness or to teach them how to participate in professional/recreational fights. That’s not necessarily their top priority as a business, but political intention does exist as part of the broader ethical fabric of the company’s existence.

Acknowledging all of the above, I don’t believe wealth exempts a business or individual from responsibility and their relationship to the rest of the economy and society. Being able to acknowledge privileges–whether earned or endowed, hopefully never exploited–might be a way to beginning to leverage them toward positive contribution and impact as well.

The gap between enthusiasm for Corporate Social Responsibility and genuine change tends to exist in part because most businesses look at it from a short-term perspective shaded solely by public perceptions of charity (e.g. send your employees for a day to clean up a neighborhood, build houses, plant trees, with a local non-profit), or at worst as a shallow marketing & PR initiative. They don’t integrate the broader political context–existing or potential environmental & social impact–into priorities for their core culture and operations.

Changing Paradigms About Charity
As a general public, most of us have a naive or divisive interpretation of charity: we might look at charity as a good compassionate activity for helping the needy on generous terms.
A less pleasant but also valid perspective might criticize charity as something that perpetuates dependence.
Either with judgmental narratives about needy people who might rely on external aid. Or in more nuanced views, dependency on philanthropy and Non-Profit organizations to make up for the gaps created by employers who underpay their employees and communities.

A few examples on underpaying employees & communities that ultimately make public taxpayers more reliant on charity and services provided through government assistance:
A company like Walmart negatively affects individual tax payers (links to Mic.com) and is susceptible to claims that employees need to rely on estimates of up to 6.2 Billion dollars in public assistance (links to Forbes article).

For communities, Walmart often attempts to slash local tax laws through “Dark Store” local tax exploitation tactics, as seen in Sault Ste. Marie, MI in 2016 (links to Bloomberg News). For a next-level big picture example, consider how ALEC, the American Legislative Exchange Council‘s members use legal tax exemptions to lobby (link to PBS’s Bill Moyers documentary).

In both cases, it creates a negative loop: a company underpays its people creating unnecessary dependency on charitable support. The company eventually gets to benefit from certain charities by also contributing funding as a “tax-exempt charitable donation” to some kind of non-profit charity, which allows the company to file a significant claim to reduce their existing tax obligation. Some would consider this a glimpse into the components of the “Charitable Industrial Complex” which creates and perpetuates systemic dependency.

Both perspectives on charity–the compassionate and the dependent one–are valid. I imagine returning to the idea that understanding a business with deeply political curiosity can help answer or facilitate evidence for solving the fundamental issues we face with attitudes about charity that lack genuine context to inform good intentions.

Aligning Politics for Purpose in a Company
Most companies altogether don’t choose to prioritize these charitable efforts in a way that aligns with their existing area of potential impact. Again, we can accept that it’s very challenging to operate a functional business in the first place especially in a small or medium sized enterprise. Small organizations frequently find attention, staff, and other resources limited if not challenging to spare.

In larger enterprises, there’s a hope that the company can delegate responsibility to an isolated department and hope all problems will be solved by a department made of corporate environmentalists and social justice advocates before the rest of the company must change course. Or if no department exists, they might seek out a consulting firm to shoulder the responsibility for (though ideally, with) them.

But think about what this means: do people delegate their every day social responsibilities to an ethicist to take care of their own personal responsibilities on their behalf? Responsibility for taking care of things that really matter to us still belongs to us. It requires us to engage in fulfilling our duties, even if we can hire assistants, coaches, consultants, therapists, or counselors for advice.

How many major companies have a department for Sustainability, Corporate Social Responsibility, of Community Relations, or Environment Health and Safety, etc.?

Ask people working in those departments at any level, from Chief Executives/Officers to interns, and you’ll likely find frustrated employees who believe the rest of the company’s leadership must to take ownership of their strategy for broader environmental and social responsibilities (even profitable ones like efficiency initiatives) to match what they say they need with what to do.

Keeping aware of your socio-political relationship to systemic problems as an individual and/or enterprise matters–you’re inevitably connected to something, an integral part of something that can become more inclusive or create value for the community(ies) your work affects.

dscn5414
Street Sign, Water Tower, and U.S. Flag in New Baltimore, MI photographed by the author.

REFERENCES

The article that started this:
http://theconcourse.deadspin.com/poverty-doesnt-need-technology-it-needs-politics-1789520902

On employment and upward mobility (jobs might be more available, but fewer offer career growth):
In the United States:
https://www.theatlantic.com/business/archive/2016/07/social-mobility-america/491240/

In the United Kingdom:
https://www.theguardian.com/society/2014/nov/06/downward-mobility-graduates-parents-jobs-careers

The Brookings Institute examines similar trends on poverty in the U.S. and its link to negligible or decreasing economic mobility:
https://www.brookings.edu/testimonies/how-to-reduce-poverty-and-increase-economic-mobility/

Kwanzaa–cooperation in economy and community responsibility:
http://www.endarkenment.com/kwanzaa/nguzosaba/ujamaa.htmhttps://elev8.hellobeautiful.com/656100/day-4-celebration-of-kwanzaa-ujaama-cooperative-economics/

http://www.reviewjournal.com/life/religion/learn-about-7-principles-kwanzaahttp://www.irha-h2o.org/?page_id=7
“Been-Ups instead of Start-Ups”
http://www.crainsdetroit.com/article/20170305/BLOG025/170309921/an-untold-story-black-businesses-that-never-left-detroit

http://www.blacdetroit.com/BLAC-Detroit/March-2017/Will-Detroit-media-ever-lift-black-businesses-up-to-the-same-level-as-Sister-Pie/

Cases on Walmart and Tax impacts
For individual tax payers–underpaying employees and public assistance:

Walmart claims the headline and study is misleading and counters the study by claiming employees have opportunities for upward career mobility and that most are paid above minimum wage on average of about $11.83/hour. The study comes from a group advocating against Walmart.
http://www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/#6f5eade27cd8

https://mic.com/articles/87891/walmart-s-wages-are-so-low-you-re-actually-paying-for-their-employees#.UXVNhKwRu

The “Dark Store” economic/legal taxation tactic: exploit old property for unfair tax advantages that benefit major big box companies regardless of impact on the local community. As seen in places like Sault St. Marie, MI:
https://www.bloomberg.com/news/articles/2016-12-08/how-big-box-retailers-
weaponize-old-stores

Other “Dark Store” coverage in Michigan:
http://michiganradio.org/post/what-dark-store-approach-valuing-properties-means-communities
http://michiganradio.org/post/local-governments-could-recoup-millions-appeals-court-ruling

On what’s not working with Michigan’s municipal financial system:
http://michiganradio.org/post/michigan-cities-team-offset-fundamentally-unsustainable-municipal-finance-system

Update: a similar case is going to the MI Supreme Court
http://michiganradio.org/post/dark-store-case-makes-its-way-michigan-supreme-court

Impact of large chain stores on communities:
https://ilsr.org/impact-chain-stores-community/

How ALEC can serve as a legal loophole for lobbying and major corporate tax exemptions:
https://www.youtube.com/watch?v=5Hmhdv_OSvA
Charitable Industrial Complex
http://www.nytimes.com/2013/07/27/opinion/the-charitable-industrial-complex.html?_r=0

http://sff.org/reponse-to-the-charitable-industrial-complex/

A rebuttal:
http://philanthrocapitalism.net/the-so-called-charitable-industrial-complex/

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