Scalable solutions to poverty. Go Micro Loans!

Today's profundity is this: We need to create charity giving and poverty reduction mechanisms that are easy to scale. I actually think it's a profound idea. Companies like Wal-Mart, Google, and Ebay are masterworks of complex, scalable, problem solving architectures. The use interchangeable programs/parts/stores/data centers/etc to make it much cheaper and easier to build up capacity, production, and distribution.

Contrast this with, for example, the massive public works programs of the "War on Poverty" or Agency for International Development. Although it's now common practice to avoid massive projects that tend to create their own problems and leave many concerns unaddressed, this may be getting replaced too often with thinking small which leads to labor intensive, small solutions that don't really do much for the big picture.

This began as an exchange with Matt at Google when I suggested taking charity donations in exchange for Dennis Hwang's signed Google logos, which have quickly become one of earth's most viewed art forms. Matt correctly noted that this was a nice idea, but hard to scale (ie there are only so many Dennis Hwang original logos).

So, what are these scalable solutions? For the undeveloped world Micro loans appear to be one such success story. These are small loans that enable "small time" capitalists to get a start in areas where cultural and economic barriers are illogical and substantial. I'm not convinced this approach can work in the USA as well as 3rd world because the barriers here tend to be personal rather than institutional.

A good test of the scalability of Micro loans is in progress now that EBAY founders are pouring money into that effort. Good for them!