[joshs]

Today, the Nobel committe made a wonderful choice for peace prize receipiant, Economist Muhammad Yunus from Banglidesh. Dr. Yunus founded a bank to provide "microloans", loans of very small amounts of money, often around $25, to poor folks, and that has made a temendous difference in many lives.

Imagine a farmer who can't afford an ox to plow his field. With the Ox, his land's productivity increases 10 fold, which easily pays for the Ox, but he lacks the credit to borrow the money to buy the Ox in the first place. Either he rents an Ox at very high rates, borrows money at a extremely high rate, or he goes without the Ox. In all these cases he can never get ahead, and remains poor forever for want of the $50 that it costs to buy an Ox.

Now Dr. Yunus comes along and says "Yes, you alone can not provide much creditworthiness. But if I pool you and 4 more like you together, collectively you provide credit worthiness. So I can make you this loan, with you and your community responsible." Defaults on these small loans have been much rarer than defaults on home mortgages, loans that come with large collateral. This is a great example of the power of the market, when it works effectively, to pool resources (and here one resource that needed to be pooled was "credit"), so that the resources go where they do the most good. Just like individual workers alone have little bargining power to improve their lot in life, but collectively they do, similarly groups of the working poor can greatly improve their individual lots in life, by tying their fate together.

A great award for a great man.

[hrothgar]

Back when I was at Wesleyan, I started out studying developmental economics. I ended switching in to Math/Econ because development was far too depressing. Nothing seemed to work.

Makes me happy to see such a simple idea prove so practical and have such a great track record. Yunus really deserves the award.

[Winstonm]

So Ms. Clinton was right after all - it does take a village.

[helene_t]

Congratulitions to the comitee for this choice !

[barmar]

Shouldn't he also get the prize in Economics?

[rona_]

Quote

Shouldn't he also get the prize in Economics?

Makes you wonder why he and Mother Theresa won the peace prize..Yunus could have won the prize for economics or they could have a prize for Compassion. No one understands how the Nobel committee works. It is supposed to be non political yet Orhan Pamuk won the prize for literature. Is that non political? ..and Yasser Arafat shared the prize for peace!

Started reading Istanbul:Memories of a city, and Snow, over a year ago and I am still struggling to finish them. I must have read about 30 books inbetween. My Turkish friends tell me they have the same experience..If any of the forum posters have read Pamuk pls comment.

[mike777]

rona_, on Oct 16 2006, 05:46 PM, said:

Quote

Shouldn't he also get the prize in Economics?

Makes you wonder why he and Mother Theresa won the peace prize..Yunus could have won the prize for economics or they could have a prize for Compassion. No one understands how the Nobel committee works. It is supposed to be non political yet Orhan Pamuk won the prize for literature. Is that non political? ..and Yasser Arafat shared the prize for peace!

Started reading Istanbul:Memories of a city, and Snow, over a year ago and I am still struggling to finish them. I must have read about 30 books inbetween. My Turkish friends tell me they have the same experience..If any of the forum posters have read Pamuk pls comment.

From what I understand no one gets his books. Better to feel superior and just say you do understand what the heck he is writing.

Snow may be his most realistic book/

[pbleighton]

"and Yasser Arafat shared the prize for peace!"

...and so did Henry Kissinger

Peter

[hrothgar]

mike777, on Oct 17 2006, 03:02 AM, said:

From what I understand no one gets his books. Better to feel superior and just say you do understand what the heck he is writing.

Snow may be his most realistic book/

Out of curiousity, did you even try to read any of his books?

I haven't, so I've been keeping my mouth shut.

[hrothgar]

barmar, on Oct 17 2006, 12:40 AM, said:

Shouldn't he also get the prize in Economics?

Economics fancies itself to be a hard science. For better or worse, the discipline focuses on constructing logically consistent models. Its nice if you can fit these models to real world phenomena, but its certainly not required.

Yunus' breakthrough was was in the realm of the practical. He found an extremely useful way to bootstrap a new banking system. The primary impact of his work will not be reaped by academic economists or central bankers, nor can it be measured by the number of citations of his work. Yunas' legacy will live on in the families that he is helping to raise out of poverty.

I think that the Peace prize is appropriate.

[cherdano]

Jlall, on Oct 17 2006, 03:15 AM, said:

I woulda given it to bush myself

And I was suggesting Justin's blog for the nobel prize in literature, but somehow the committee got my e-mail too late. Next year maybe.

[joshs]

I expected Aaron blog to be up for both the literature and the peace prize. Uh oh, this post might get censored....