NGOs Throw Money at Poverty, and Then Declare Success

Mark Pendergrast, in his opus on coffee, tells us about Bill Fishbein, a coffee retailer from Rhode Island, who wanted to help small, poor, coffee farmers in Guatemala:

 

(p. 419) . . . , Fishbein wanted to do something to help.  At first, he worked with established nongovernment organizations (NGOs) but soon became disillusioned. Too often, the NGOs simply threw money at communities, then declared projects successful even without long-term improvements.  "It amounts to a network to move money around, to pull the heartstrings of donors," he complains.

 

Source:

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.

 

Specialty Coffee: How Does it Fit Christensen?

Christensen and Raynor:

(p. 55) Not all innovative ideas can be shaped into disruptive stategies, however, because the necessary preconditions do not exist; in such situations, the opportunity is best licensed or left to the firms that are already in the market. On occasion, entrant companies have simply caught the leaders asleep at the switch and have succeeded with a strategy of sustaining innovation. But this is rare.

 

Source: 

Christensen, Clayton M., and Michael E. Raynor. The Innovator’s Solution: Creating and Sustaining Successful Growth. Boston, MA: Harvard Business School Press, 2003.

 

In several later chapters of Mark Pendergrast’s Uncommon Grounds, he documents how the major coffee retailers failed to perceive and respond to the threat posed to their business by the specialty coffee retailers.  In some ways specialty coffee firms would seem to be disruptors.  But they were neither "low end" nor "new market."  Wasn’t specialty coffee what Christensen would call a "sustaining innovation"?

 

Hayek Was Right: Free Speech is Fragile, When Property Can be Seized


For those who doubt the central message of Hayek’s The Road to Serfdom, something to ponder:

 

(p. 351) The Sandinistas called coffee farmers who cooperated with them "patriotic producers." Anyone who questioned their politics or policies was labeled a capitalist parasite. Throughout most of the 1980s, any farms that did not produce sufficiently, or whose owners were too vocal, were confiscated by the government.

 

Source: 

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.


Coffee Cartel Quotas: “someone always cheated”

In his comprehensive history of coffee, Mark Pendergrast discusses efforts of the coffee-producing nations to raise the price of coffee in 1977:

 

(p. 332) Quota restrictions without consumer country participation never worked in the past, since someone always cheated.

 

Source:

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.

 

Solzhenitsyn Endures: The Return of “The First Circle”

    Source of book image:   Amazon.com.

I remember Ben Rogge recommending The First Circle, decades ago when it first appeared in English. It is a powerful, courageous, wise work, bearing many lessons. As you read the book, you keep hoping you can find someone to blame for the evil that is happening. But as Solzhenitsyn works his way up the bureaucracy, each bureaucrat has a plausible motive for his part in evil; one motive, for example, is the protection of the bureaucrat’s family. Only when you reach Stalin, do you find someone who you can really despise. But he seems borderline crazy, so even he is not a totally satisfying villian.

The book can be seen as illustrating a point that Rogge often made: socialism is not bad because it is run by bad people; it is bad because it provides ordinary people incentives to do bad things. (These are not his words, but I believe they capture his point.)


Alexandr Solzhenitsyn. Source of image: online version of the NYT article quoted and cited below.

(p. A1) MOSCOW, Feb. 8 — A grandfatherly figure, his bearded face wrinkled into a smile, peers down from billboards around town.

It is surprise enough that the man is Aleksandr I. Solzhenitsyn, the once-exiled writer, Nobel Prize winner and, of late, octogenarian scold. It is even more so that the billboards advertise his adaptation — broadcast on state television, no less — of one of his fiercely anti-Soviet novels, “The First Circle.”

Solzhenitsyn has been called the conscience of the nation, but his reputation has risen and fallen as tumultuously as Russia itself since the collapse of the Soviet Union. “First Circle” has once again placed him on the national stage, reaching an audience that would have been inconceivable to him four decades ago, when he smuggled the book out of the Soviet Union.

For the full article, see:

STEVEN LEE MYERS “Toast of the TV in Russian Eyes: It’s Solzhenitsyn.” The New York Times (Thurs., February 9, 2006): A1 & A3.


A scene from the Russian mini-series version of The First Circle. Source of image: online version of the NYT article quoted and cited above.

“Better Coffee Rockefeller’s Money Can’t Buy”

(p. 263) In the middle of this fierce competition, with its low quality standards and apparent market saturation, a New York nut vendor and restaurateur proved that a new brand stressing quality could triumph.

 . . .

Black understood the power of advertising.  In radio spots, which blanketed the New York metropolitan airwaves,  Black’s second wife, Jean Martin, sang a hummable jingle:

Chock full o’ Nuts is that heavenly coffee,

Heavenly coffee, heavenly coffee.

(p. 264) Chock full o’ Nuts is that heavenly coffee-

Better coffee Rockefeller’s money can’t buy.

By August 1954, less than a year after its debut, Chock full o’ Nuts had grabbed third place among vacuum-packed coffees in New York City.

 

Source: 

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.

(Note:  ellipsis added.)

 

Using a T-shirt to Tell the Story of Progress


Source of image: Amazon.com

The protests occurred on ”a cold day in February 1999.” Ms. Rivoli was watching as students gathered at the gothic centerpiece of Georgetown to demonstrate against the International Monetary Fund, the World Trade Organization, and other putative villains of international trade. The crowd, Ms. Rivoli noticed with characteristic acuity, had ”a moral certainty, a unity of purpose” that permitted it to distinguish black from white and good from evil ”with perfect clarity.” One woman seized the microphone and asked: ”Who made your T-shirt? Was it a child in Vietnam? Or a young girl from India earning 18 cents per hour? Did you know that she lives 12 to a room? That she shares her bed and has only gruel to eat?”
Ms. Rivoli did not know these things, and she wondered how the woman at the microphone knew. But she decided to find out. In the rest of her narrative, the author tells the story of ”her” T-shirt, which she purchased for $5.99 by the exit of a Walgreen’s in Fort Lauderdale, Fla. ”It was white and printed with a flamboyantly colored parrot, with the word ‘Florida’ scripted beneath.” A company in Miami had engraved the front, after buying the shirt from a factory in China. The Chinese manufacturer had purchased the cotton used to make the shirt from Texas. Eventually it will end up as part of a large but little-known market for used clothing destined for resale in East African ports.
. . .
By looking across history to the shifting center of textile manufacturing from Manchester, England, to Lowell, Mass., to South Carolina to Japan and, finally, the developing nations of Asia, Ms. Rivoli discovers a universal truth. Without making light of the horrors experienced by workers, she asserts that their jobs were a little better than other available options (usually farm work) and, what’s more, that textile factories led to advances in industrialization and, just as dependably, in living standards. It is not too much to say that she uses the T-shirt to tell the story of progress.

For the full commentary on Rivoli’s book, see:
ROGER LOWENSTEIN. “OFF THE SHELF; Travels With My Florida Parrot T-Shirt.” The New York Times, Section 3 (Sun., August 21, 2005): 7.
The book is:
Pietra Rivoli. The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade. John Wiley & Sons, 2005. ISBN: 0471648493