Recently read one nice book that talks about trade as an effective tool for poverty alleviation. The writer makes interesting argument. He says ‘When we trade, we trade our advantages’. Meaning after the trade, both the parties are better off.
The examples are numerous. In fact the success of today’s on-line economy lies in the fact that it provides so many tools that encourage effective trade of ideas, source code for computer programmes, data, knowledge, information, in fact wealth in all on-line forms. Take example of open source programming projects. Their mailing lists are very effective tools of sharing their knowledge and pieces of source code, so in fact a great tool for “trading advantages”. If somebody is interested in working on user interface, he/ she can trade programming code with somebody who is more interested in working on say inner kernel levels. So at the end of the day, both people are better off, because both have code for user interface development as well as kernel development.
Can we take this example and apply it to the rural India? The lack of infrastructure severely limits the possibilities of effective trade. Most of the communities have weekly market. That is their only time to trade things they have for things they want. That is the only time they have economy as such in their life.
What if two or three small villages (adivasi padas), of about 100 people each start trading more frequently using some tool such as walkie-talkie? Every evening they decide a time and place where the people gather together for chatting with a couple of villages in the vicinity. They look for trading opportunities. They fix the trades on walkie-talkie with some person sitting in another village and execute these trades within a day or two. Effectively they have a very small equivalent of stock exchange.
This will help them share farming tools etc. and thus use their tools more effectively and productively. Also this will help them find market more market to what they produce. They can share knowledge, build a support structure. Once this takes deep root, there will be secondary industries, service businesses growing around this structure. For example, once you have trade patterns in place, somebody will end up taking charge of providing courier-equivalent service. Also in long term, this will be evolution of the institutions that are very much aligned in the interest of rural community.
So more trading, effective trading can help accelerate poverty eradication.
What do you think?