Enlightened Capitalism

Essays about how to harness people's natural desire to create wealth and improve their quality of life to solve global problems such as war and poverty.

Sunday, May 28, 2006

Another solution to poverty

I had a vision the other day of a new solution to poverty. First, list all the governments and groups that are donating money to help the poor, including welfare in rich countries, and sort them by how much money they are giving.

Start with the biggest one, perhaps it's the US government's assistance to Brazil or whatever it is. Maybe it's our own welfare programs. Anyway, instead of money, give solar panels.

Use the money to buy solar panels, and then donate the solar panels directly to the people we were giving some other kind of assistance to. Publicise this fact, so that anyone who wants solar panels will know that these poor people now have them, and will probably want to sell them in order to buy stuff they need.

A small number of the solar panels might end up on poor people's roofs or leaned up against their tents powering radios or electric fans. But most will get sold.
Keep doing that. The beauty of it is that the only way a solar panel has any value is (1) it has to be out in the sunlight, and (2) you have to have a use for the electricity generated. So the panels will quickly find themselves in the hands of either people with electricity needs or entrepreneurs who want to sell electricity to others.

Solar panels that don't satisfy (1) and (2) are worthless and yet can be sold for real money. The point is that a large electric generation capacity will grow up overnight. This infrastructure will enable other industries to develop, particularly in useful electronic devices.

You can monitor the street price of solar panels, and if it ever drops too low (unlikely, if everyone knows about this, on ebay solar panels don't sell for any discount at all, there are way more buyers than sellers) then you switch momentarily to something else, like bicycles.

The assets you donate instead of money all have to have the same traits, they are worthless unless used to create wealth, and (unlike food or clothing) they last a long time without depreciating in value, and there is a resale market, or one could arise instantly.


  • At 6:54 am, Blogger Sam Rose said…

    Hi David! This is Sam Rose. I like your idea. It seems to me that your idea is really an investing in infrastructure idea. The only thing that I would hope is that the solar panels would not be comandeered by black market forces, thus snatching the value out of the hands of the different people they were intended to help.

    I wonder if the same thing could eventually work with mesh networking devices? Once WiMax devices become small and portable and inexpensive enough, this could be a way to spread a decentralized wireless broadband internet into areas where it currently doesn't exist


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