After my Herbal Material Medica and Permacultural courses were finished, I signed up to audit the MIT sponsored online course entitled The Challenges of Global Poverty. The text for the course was entitled Poor Economics by Abhijit V. Banerjee and Esther Duflo who were also the instructors. While I’m not by any means an economist or statistician, I knew enough about statistics to know when something was statistically significant or not but not enough to figure out the more complicated equations. I managed to slide by with a 75 final grade.
I did learn quite a bit about living in poverty and as a consequence, I was able to look at my life here in rural Mexico with new eyes. Most of the samples in the class were from rural India, but it was amazing how similar the culture of poverty is throughout the world.
Here are some of the things I learned and how that information relates to my life here in Mexico:
Many poor are unable to obtain traditional credit or open bank accounts. As a consequence, complicated processes are invented to set aside money needed for future expenses. One method of saving is known as a tanda in this part of Mexico. A tanda is a group of people that contribute a set amount of money each week or pay check or whatever the time frame has been determined. Each member is assigned a number. One member receives all the money each pay period. (See A room of her own–furnishings) It allows the participants to ensure that the money needed for a particular item is available when that expenditure is due.
Mentioned in class was the institution of money lenders. In India, repayment is enforced through public shame and the possibility of sending a eunuch to show his genitals to the delinquent borrower (a form of intimidation). While Mexico is not known for its eunuchs, shame is a big motivator here as well. Often lists of people who owe money are posted outside establishments for the entire community to see.
Many villages in India have a sort of informal lending between families which allows those in need to receive money or assistance with the understanding that it will be paid back in the future. In Mexico, the madrina/padrino (godparents) tradition is a version of this informal lending. When a family is planning a major event like a baptism, wedding, graduation, quinceanera, etc., a variety of extended family or community members are asked to take on the role of godparent. The so honored are financially responsible for a particular aspect of the event, napkins, shoes, seating rental, mass, etc. This is done with the understanding that at some time in the future, such expense will be repaid by the recipient family in the form of another madrina/padrino setup. (See Chambelan at the church, Chambelan at the party, Secondary Graduation)
Mexico, like India, has a high number of micro businesses. Often these businesses are run by women. These are self-limiting businesses. Time spent on the business is often scheduled around other obligations such as child care or meal preparation. A larger investment in the business is not feasible because the business is limited by its product or demand. So each day, the business owner earns just enough to get by, never more. (See Failing at your own Business)
The course mentioned the excellent health care in Mexico. Perhaps it is excellent in comparison to India, however from personal experience, the health care in Mexico, while affordable, is not magnificent. (See All Around the Health Care Bush, Mexico’s Seguro Popular) Health care impacts the poor the most since a major illness and/or death of a family member often eliminates any savings the family may have accumulated. (See Mass and Burial Mexican Style)There is also a tendency to request injections or pills from doctors so doctors prescribe them whether they are needed or not. Again, very similar to Mexican customs.
I found it interesting that India has a version of curanderos as well. Since actual medical professionals are beyond the limited means of the poor, sick family members are often brought for prayers and herbal treatments. (See La Curandera).
The poor find it difficult to save money for several reasons. One reason is that women, who tend to try to save more often, frequently find their money being appropriated, whether with permission or not, by male family members. Men are more likely to spend the money on impulse buys and non-essential goods, like alcohol and tobacco. No comment from the peanut gallery on this startling scientific find on gender bias and spending habits.
Because of this appropriation of funds and the difficulty of self-denial, cash is often converted into physical goods. Gold jewelry is a common investment that is easily liquidated when the need arises. Here in Mexico, the US dollar, considered more stable than the pesos, is another way people save. When the dollar is low, people buy it from the casas de cambio (money exchange places) and then try to time the resale to a period when the peso is low. Of course, jewelry and cash can be stolen as well. Sometimes the investment is in livestock, although this sort of purchase carries the additional risks of illness or death. And still the very determined can make off with goats lifted over a 6-foot wall. (See Good Fences make Good Neighbors–unless your neighbors steal them, Where oh where have they gone?)
The poor sometimes choose to invest in building material instead. La Yacata is a silent testimony to the hopes and dreams of the poor. Half-finished homes, foundations poured, rooms open to the sky, just waiting for another small windfall of cash. (See Building a dream, constructing a life)
With all these negatives to saving, many poor would rather spend the money while it’s available instead of trying to save towards some future goal. This is a predominant cultural norm in this area of Mexico and it’s hard to argue against it. Every month there seems to be a festival or other event where you can spend money. (See Mexican Holidays) Every business and home have a TV to while away the slow hours. Homes with no indoor plumbing have 2 or 3 cell phones per family. The idea is life is hard, might as well enjoy what there is to be had.
Neither the course nor the text provided any real solutions to overcoming poverty. In fact, there was sort of a general shrugging of shoulders and dismissal–well, we’ll always have the poor. It was interesting to learn that once an individual or family falls to a certain income level, they are trapped in poverty and it takes an incredible amount of effort (and good luck) to rise to an income level where real progress can be made. For the most part, the poor just don’t have the social contacts, knowledge or investment opportunities to pull themselves up by their bootstraps into wealth.
One of the biggest factors in global poverty was found to be institutional corruption. In this, there was less hopelessness expressed by the authors. Small things, such as adding a picture to voting ballots, changed the outcomes and thus the structure. However, I’m not so sure how much change really can be brought about. Institutional corruption is pervasive. It not only encompasses the political arena, but also health care, the environment, and education. (See Mexican educational reform and political wrangling, Politicking, Local Elections) Those that are affected most are the poor. Their water is polluted because of corruption. Their children are not well-educated because of corruption. Their health suffers and they are unable to receive proper medical attention because of corruption.
In fact, one study highlighted in the course demonstrated that the type of colonization an area was subjected to affected the living conditions of the people hundreds of years later. Mexico was unfortunately conquered by the Spaniards who were bound and determined to extract every last bit of wealth from its soil. The subsequent governing body set up by the Spaniards was established with plunder, not social good, in mind. Thus it remains down to this day. (See Women in Mexican History–La Malinche)
Unfortunately, it isn’t possible to cover all 12 weeks of the course in one blog post. These are the points that stood out to me having first-hand experience in my poverty stricken life here in Mexico. All in all, it was just a tad depressing. Not to be deterred, I’ve signed up for a new course–The Science of Happiness. It certainly promises to be a lighter topic!