Over The Counter Culture

Wall animation from Italian artist Blu

Godwin’s Law states: “As a Usenet discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one.”

It’s often mixed in with Reductio ad Hitlerum: Invoking Hitler automatically makes you lose the argument.

On that basis, given the video below, should Obama bow out of the US Democratic candidacy race?

(the video, by the way, is an absolutely brilliant instance of a novel Internet meme, putting new subtitles over scenes from Downfall, a good film recounting Hitler’s last days before his suicide oin a Berlin bunker – but it’s doubtless very offensive to HillDog)

In the ‘Tuymans Experiment’, Luc Tuymans (widely hailed as one of the most important artists in the world – e.g. the Tate Modern’s description here, and the curators describing him in the first minute of the video above) decided to radically shift the context of his art.

He reproduced one of his most famous paintings on a wall in Antwerp, to see how people responded to it. Curators predicted 90% of passerbys would stop and contemplate. In fact, just 4% stopped. A painting that in a gallery makes close to 100% of people stop and think for a few minutes, and appreciate the art for the thoughts it made them explore and the new ways of seeing something that it gives them, was remarkably valueless when transposed from the art gallery walls to a street wall. Context turned a ‘million dollar’ picture with the power to influence people and the way they think, into a vulgar paint daub on an alleyway wall ignored by 96% of people passing by.

There are vast ramifications to this point; I would love to hear your suggestions in the comments below. When I watched this video this morning, here are some other stories just from today which my mind immediately made connections to. Some will be obvious,  others obscure (because we share some context in common, but not all of it, so the value of some objects, in this case our ability to draw connections between them, will differ greatly):

- Seth Godin: Avoiding the Passion/Pop Gulf

- Uncivil Society: Filesharing Theology

- EuropeanStartups: The New Digital Divide – Building Web Services for the Mainstream

- Uncivil Society: From red light district to red charity

- Broadstuff: The involuntary redundancy of A list blog sites

For any investor or entrepreneur in the Web2.0 space, understanding and accurately recognising the different contexts is going to be key to positioning yourself inside, or outside, the growing dotcom bubble. I fear too many services get drunk on their popularity with geeks and fail to gain traction where it matters: with people who have never heard the term ‘Web 2.0′ – these are the people that make Google all its money, for all its popularity with nerds.

A storm is brewing. For the past few years, micro-credit [the lending of relatively small amounts of money without requiring collateral to entrepreneurs and small business owners in impoverished countries, aiming to stimulate the SMB stratum there and create jobs] has promised a great deal. Mohammed Yunus famously won the 2006 Nobel Peace Prize jointly with his micro-finance institution (MFI), the Grameen Bank.

But 2008 has seen the start of a major backlash. Accusations are flying of heavy-handed mafia-like behaviour:

Korshed Alom, a former debt collector, was put into early retirement for having questioned the Grameen Bank’s methods: “Their technique is to scare borrowers and insult them. We tell them to sell their clothes, that they have no other choice. I’m not proud of myself, but several times, I had even been obliged to say ‘sell your children.’”

I’m not going to be as quick as others have been to jump on the anti-microfinance bandwagon though. A finance system relies on debt repayment, or there’s no incentive to loan the money. The interest rates are not onerous, so repayment should be achievable if the business it was loaned to is sound and the repayment rates set by the Grameen Bank were reasonable. But the fact is, in some cases people are being plunged further into debt, rather than escaping from it; that’s always a risk when you take on debt, but if this is happening too much, then the poor will stay poor and the beneficiaries will be the vendors of business services, equipment and inventory whose stuff is bought with Grameen’s loans. There are four possible failures here; I think it’s unfair to criticise the Grameen Bank for insisting on recovering its loans – these are helping hands, not handouts, and the money will dry up if default rates grow.

1. Failure to properly assess the viability of the business or the entrepreneur’s talent. If someone is likely to default, don’t give them the rope with which to hang themselves!
2. Failure to properly educate people, first to determine whether this is the right thing for them, secondly what the consequences and expectations attached to these loans are, and thirdly, maybe closer monitoring and business training over the term of the loan could be provided to reduce default rates organically
3. Interest rates are too onerous. Reportedly they’re in the region of 20%. That’s a remarkable growth rate to achieve.
4. Failure to set the right repayment schedule, demanding money back before it’s had time to provide returns

But what worries me a great deal more than a few unhappy endings for loans (it has 100 million clients, aiming for half a billion loanees by 2020!), is this. The Grameen Bank, its employees, and even the Nobel Peace Prize winner, Mohammed Yunus, have gone to ground – journalists are met with total impasse and obscurity when they try talking to these people for their side of the story, finding out more about default rates, etc. I refuse to believe that anything that’s truly good or humanity and treating humans respect should have the slightest thing to hide – from the most boring memo, to the opinions of its staffers, to its accounts, etc. What needs to happen after this story is not a call to end microfinance, but a call for total openness and transparency.