What The Third World Can Teach Us About Economics

I saw this article the other day in The New York Times, and wanted to weep both with sadness and joy.  Sadness, because of the health risks people in the Third World are willing to undertake simply to extract tiny amounts of value out of our discarded gadgets.  And joy because, perhaps unintentionally, these same people are teaching us about the path the 21st-century economy should take, as well as reminding us what real entrepreneurism is.

The 20th century was the age of "disposable" products.  I put "disposable" in quotes because, in point of fact, nothing is truly disposable.  We simply take raw materials, transform them into products and then, ultimately, transform them into "waste," which doesn't always mean that they are destroyed.  They're just occupying space in a dump somewhere.  Out of sight and, sadly, out of mind.  But not out of our ecology and, therefore, not outside of our health.

We desperately need to evolve from a consumption based economy to a recycle economy.  That doesn't mean compromising our lifestyle; it means finding sane ways in which to save it by understanding that, not only are resources finite, but transforming and disposing of them has dangers as well, both obvious and hidden.  If desperate people in pour countries can retrieve precious metals through the most primitive of means, imagine how much more we could retrieve and reuse if private industry, supported by public policy, was geared toward recycling of goods to the maximum possible extent.  Then those resources could be retrieved efficiently and safely, and continue to enrich our lives over and over again.

One side effect of this:  as the supply of resources was being maintained through this process, the costs of both producing and purchasing the goods would stay under control.  And any number of new jobs would be created by the need to recycle, offsetting the loss of jobs as old sources of raw materials diminish.

Which brings me to my second point.  To be an entrepreneur in the truest sense is to be a risk-taker.  The Third World gatherers of precious metals are literally putting their lives on the line simply to support themselves.  Where is that kind of initiative to be found in the United States?  Measured by that standard, we do not have entrepreneurs; we have state capitalists.   We have, for example, banks whose reserves are swollen not only by money they refuse to lend, but by payments from the Federal government--payments that, if cut, would pay for the end of the so-called sequester.  To a child in Head Start, whose life is not much better than his or her Third World counterparts, this would (sorry, Shakespeare) be the kindest cut of all.

We think we have so little to learn, both from other countries and the poor.  Nothing could be further from the truth:  they have everything to teach us.  And, if we learn it, we might save ourselves.  From ourselves.