Will we have emails in the future, Econ 101, and the downside of unchecked micro-financing
This week I came across some short but impactful stories that nudged me to reflect on the downside of good innovations. Here are three that I found most interesting:
• If there is one social innovation that has brought significant number of poor out from poverty, it’s micro-financing. The underlying idea behind the concept is to offer small loans to poor people without collateral to spur entrepreneurship. The interest rates are high but debtors, more often than not, pay back their instalments in time and in full. Muhammad Yunus was awarded Nobel Peace Prize for pioneering the concept of micro-finance in Bangladesh. His autobiography best documents this journey. Since then, micro-finance has been enthusiastically picked up by governments in several developing countries. Sri Lanka adapted it too. However, this eye-opening story came out last week on how micro-loans are driving borrowers to despair and further poverty. It’s a troubling story that reflects what happens when boundary conditions (in this case, who deserves the loan, how to ensure corruption-free implementation, to name a few) are not recognized or adhered to.
• In the background of the ongoing trade war between China and the US, and fast-growing indications of a weakening economy, it’s perhaps a good time to brush up the fundamentals of economics. While there are several recently published good books on the topic — for instance, Doughnut Economics and Stone Age Economics — I found the good old Naked Economics by Charles Wheelan most useful. I finished reading it last week and Wheelan has a simple, and often funny, way of explaining complex topics. I found his commentary on US’ current account deficit (page 273 onwards) especially helpful to understand the reasoning and possible ramifications of the ongoing trade war. While the entire book is good, if you have time to read only one chapter then read the one on International Economics. ‘The two countries are arguably locked in an unhealthy symbiotic relationship that has the potential to come unglued at any time’, Wheelan writes in it. And that’s exactly what seems to be happening right now.
• A new term that I came across this week: asynchronous messaging. Synchronized messaging is something where all parties participate at the same time, i.e. face to face meeting. Asynchronous messaging — for example, emails — doesn’t require dispatcher and receiver to be present at the same place at the same time. It’s not a new term, and has been known for long, but I stumbled across it while reading this fascinating story on the history and impact of emails. According to the article, asynchronous communication has induced more complexity. For example, according to one study cited in the story, we, on an average, end up checking our emails 77 times a day! However, synchronized communication is clawing its way back, through collaboration frameworks like Scrum. The story is written by Cal Newport, whose book Deep Work I commented on here earlier.
A quote I came across last week:
I am all for progress. It’s the change I don’t like.
- Mark Twain