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The huge diversion that microcredit represents


Tags Money and BanksCapital and Interest TheoryMoney and Banking

I was amazed that when Muhammad Yunus, head of the state-supported, quasi-socialist, regimentation-promoting Grameen Bank, received his Nobel Prize that free-market commentators bought into the propaganda. They threw their hats in the air, and their brains too. It reminded me of how conservatives all lauded Jack Kemp’s program for “home ownership” without thinking critically of the means of ownership. For that matter, too many have been fooled by the Bush administration’s early rhetoric about creating an “ownership society” via government activism.

In any case, I’m pleased to see that microcredit has at least one critic at Cato: Thomas Dichter. His paper doesn’t include many details about current microcredit but it does talk about the fallacy of equated individual and social prosperity with the expansion of debt. Excellent.

By the way, ever since my stuff on Yunus has appeared, I’ve been receiving strangely ominous notes and packages from people who have variously worked at Grameen through the years, and they promise to give me the inside dope on the bank, and all the gritty and awful details, provided that we meet in some prearranged place or that I do not quote them by name and that they don’t have to put their name to their criticism. There must be some scandal lurking out there that someone could dig up if he looked hard enough.


Jeffrey Tucker is Editorial Director of the American Institute for Economic Research. He is author of It's a Jetsons World: Private Miracles and Public Crimes and Bourbon for Breakfast: Living Outside the Statist Quo. Send him mail.

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