In college I had to read a book called How Europe Underdeveloped Africa by Walter Rodney for a comparative studies course on the sociology of the African and the African-American experience. The basic premise of the book is that capitalism got its roots by the exploitation of the continent of Africa. Europe exploited Africa's people for slaves and its natural resources for wealth in the New World. The book is critical of capitalism, and (to the degree that my memory serves me) offers socialist answers to the problems of capitalist exploitation.
How ironic, then, that capitalism might be the answer to help Africa prosper. Dambisa Moyo's new book called Dead Aid asserts that Western aid to Africa (in attempts for absolution?) has actually hurt the continent's development. (Read Gilbert Cruz' book review here.) Through microfinancing, agricultural trade, and direct infrastructure development, the West can profit from Africa and Africa can prosper too. While the dark underside of capitalism is exploitation, I don't think it should surprise anyone that trade and finance help make both partners wealthy. I think people forget that the opening treatise on capitalism was called The Wealth of Nations.
Adam Smith didn't believe the argument that we always exist in a zero sum economy with limited resources to be shared by all. He believed that wealth could grow. The essence of capitalism is that wealth grows, while the essence of socialism is that wealth is redistributed or shared (this is the reason that I think free trade is far superior to any kind of protectionism proffered by Democrats). It's important to maintain that neither economic system is inherently a moral one, but if capitalism is shared with a culture that maintains a moral consensus (read: a Judeo-Christian ethic) then it is by far the superior system. Moyo's book affirms the merits of capitalism. It might seem ironic, but the most moral thing we could do for Africa is to do business with them. It is far superior to free aid.
For the best defense of the virtues of capitalism, read Michael Novak's classic, The Spirit of Democratic Capitalism.
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One of the biggest things I'm a proponent of is entrepreneurship. I'll go to the grave defending it as beneficial to an economy and nation, on a variety of levels.
I like microfinancing because it's a slimmed down version of entrepreneurship. Average Joe American who wants to give $100 to an African to set up a market stand is just like organizations like the Small Business Association who would hand out $100,000 to set up a bookstore in a mall outlet (or something).
My point is that I hear a lot from the Left that microfinancing is bad and it's all about big trade and big government. But we need to remember that even these megacorporations in America started out as a Mom and Pop back in the day.
Whose to know that the next microfinance loan to Earl in Uganda won't be the next Ford or U.S. Steel?
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