Saturday, October 10, 2009

A Nobel Idea

The announcement that President Barack Obama had won the Nobel Peace Prize came as a shock to everyone--or nearly everyone. The only person who seems to have had any inkling that he was a contender was a world renowned sports handicapper who claimed he was a "reasonable long shot at 14-1." The decision was controversial, to say the least. Most pundits seem to feel that the award was premature, pointing out that he has been in office for less than a year. In fact, the nominations for the prize closed 12 days after he was sworn in as President. Even the President didn't seem to feel he deserved the prize. In his own words, "I do not feel that I deserve to be in the company of so many of the transformative figures who have been honored by this prize."

The cynical view is that Obama was awarded the prize simply for not being George W. Bush. There is certainly reason to believe this, especially given that Al Gore has also recently won the prize. A more likely view--the view propounded by defenders of the decision--is that the award was meant as collateral. In short, the award was given to the President to remind him of his promises, and to encourage him to see them through. This seems to me to be the correct reasoning. After all, his campaign was largely fought on issues such as ending the Iraq War, and closing Guantanamo Bay. Neither has been accomplished. In fact, rather than bringing troops home, the President is sending more troops to Afghanistan. While I am not judging any of these decisions, it does seem to me that liberal internationalists have reasons to be anxious. Hence the Nobel.

While the goal of reducing international conflict is noble, the Nobel Peace Prize was not meant to be bequeathed for good intentions. Neither was it meant to be awarded as a token of encouragement. The award was intended for those who have "done the most or the best work for fraternity between nations, for the abolition or reduction of standing armies and for the holding and promotion of peace congresses." While the literal words of Alfred Nobel seem to suggest that the prize would be reserved for political contributions, some of the recent prize winners have shown that fraternity between nations can be promoted in very indirect ways. The best example of this was the 2006 prize, which was awarded to economist Muhammad Yunus and the Grameen Bank. Mr.Yunus founded the bank in 1983 in Bangladesh. He founded the bank on the principles that "that attacking poverty is essential to peace, and that private enterprise is essential to attacking poverty." The bank makes tiny loans, as low as $20, to people who would otherwise have difficultly obtaining loans. Most of it's customers have been destitute women. To date, the bank has lent out nearly $6 billion dollars. While the issue of poverty in Bangladesh has not yet been solved, the Grameen Bank has made a significant contribution.

While the Grameen Bank is a major innovation, there are some limitations. The Bank relies on major contributions from a variety of foundations and major contributors. Though these sources of funding are extremely important, the bank is missing out on a potentially massive source of funding: the average citizen. Recognizing this limitation, Matt Flannery and Jessica Jackley founded, a website that allows for individuals to make interest free loans to third world entrepreneurs. Kiva has received endorsements from such diverse sources as Zambian Economist Dambisa Moyo, Oprah Winfrey, and Bill Clinton. Clinton also wrote about in his recent book Giving. To date, over $95 million dollars have been lent out by more than a half a million people. The repayment rate is an impressive 98.42%.

Many people are skeptical of making donations to alleviate third world poverty. The third world seems to be a sinkhole where money either disappears, or is stolen. This type of skepticism is likely what lead New York Times columnist Nicholas Kristof to follow up on a loan that he made to a baker in Afghanistan. Kristof was able to track down the man, and had the opportunity to sample the bread that his loan helped to bake. The loan consisted of $425 from seven different families and individuals from across America. By spending less than 10 minutes on the website, and donating as little as $25, these seven donors were able to help lift an aged baker out of poverty. If that doesn't count as encouraging fraternity between nations, I don't know does. It is for this reason that I believe Matt Flannery and Jessica Jackley deserve to win the Nobel Peace Prize.

On a personal note, I have been lending through ever since I heard about the site 2 years ago. Every single loan I have made has been repaid promptly, and in full. I encourage everyone to go to to make a loan. As little as $25 can help to lift a struggling entrepreneur out of poverty. It will also make you feel good knowing that you've helped to make a difference.


  1. Thanks for posting this. I actually linked to your post in my most recent post about Kiva - I think you are dead on about the importance of microloans and what they are doing. Thanks for sharing this!

  2. Thanks! Love your blog btw. I'm a huge film geek, so I'll have to check back in.