Subjects of Risk: Technologies of Gender in the Making of Millennial Modernity
Ethics in the Age of Crisis
The 2011 Microfinance USA conference was held in New York City. A gathering of nearly a thousand microfinance practitioners, the conference aimed to build “a microfinance movement in the United States.”1 But the meeting was also an expression of a growing anxiety within this community about what one plenary session suggested was the “promise and peril of microfinance.” With heady enthusiasm, speakers in the opening session of the conference declared that they were “building a movement, not an industry . . . that it was necessary to throw out the bad actors and charlatans who had made their way into [their] space.” The talk of “ethical” and “responsible” finance was everywhere. A key theme of the meeting was to promote a set of “client protection principles” and “to make those principles part of the DNA of microfinance.” Presented as a “borrowers’ bill of rights,” this was an instance of the ethicalization of finance. Globally renowned profit-making microfinance organizations such as Compartamos Banco, once celebrated as models of success, were sharply critiqued as loan sharks that undermined the social mission of microfinance. In a strong rejection of credit as a remedy for financial exclusion, speakers at the conference repeatedly drew attention to alternative financial services, such as savings, making the case for asset building rather than for a trade in debt. In the written welcome to the conference, important microfinance luminaries thus presented the task at hand as building “a more inclusive financial system — one that provides access to capital to business owners on Main Street who are unlikely to get their first loan from Wall Street.”
This essay is an effort to take seriously the particular conjuncture of market rule and dissent represented by the 2011 Microfinance USA conference. Microfinance, the practice of making microloans to the world’s poor, mainly to poor women, is a highly popular poverty intervention. It is also an instantiation of what may be understood as “bottom billion capitalism,” the integration of the billion or so people living under conditions of extreme poverty into global circulations of finance capital. In my previous work, I have shown how bottom billion capitalism must reconcile specific contradictions.2 On the one hand, it is an experiment with the democratization of capital, or with what Bill Gates, Warren Buffett, and others have conceptualized as the creativity of capitalism.3 On the other hand, it is an experiment with strategies of capital accumulation, those that can mine what business school guru C. K. Prahalad famously titled “the fortune at the bottom of the pyramid.”4 Microfinance is a microcosm of bottom billion capitalism and thus a useful site at which to investigate such conjunctural formations.
Globalized as a poverty panacea in the mid-1990s, microfinance was retooled by World Bank experts as a global asset class with the potential to become a valuable portfolio for investment banks. At the margins of the “risk frontiers” of money markets, microfinance was the exotic instrument that survived the financial meltdown of 2008. But what is at stake in the 2011 Microfinance USA conference is much more than the unrelenting march of global capital. The anxieties on display at the conference speak to the active production and negotiation of bottom billion capitalism and in particular to the deployment of “ethics” to manage frontiers of risk. If this is neoliberalism at work, then following Jamie Peck, what must be traced is the mongrel character of such neoliberalism, its fragile construction, its contradictions.5 And if Patrick Joyce provokes us to think about the agonism of liberalism — “its definition of itself as a moral struggle, a struggle in and with the world of the political” — then it is also necessary to investigate the agonistic character of neoliberal reason.6 Two fragments from the 2011 Microfinance USA conference illuminate these issues.
A Trade in Debt
A rage and fury animated the 2011 Microfinance USA conference — “We are building a movement, not an industry” was the mantra. This motley crowd of nonprofit executives, social venture capitalists, and financial management experts had been transformed into activists, reclaiming “microfinance space” from a seemingly rapacious commercialization. The reclamation of the microfinance commons took place in the name of the poor: “the pride, dignity, and rebuilt self-worth” of the poor. But ultimately it was finance that was the grounds of such rebuilt self-worth. Not surprisingly, then, the conference was also the work of finance. Alongside the effort to restore an “ethics,” a “moral compass,” to microfinance was the mundane and banal work of enacting credit scores and managing investment vehicles. For example, in a series of sessions the focus was on microfinance investment vehicles that can generate sustainable profits for investors. A session moderator from Morgan Stanley defined the mandate as transforming microfinance into “a commercially viable asset class to all investors, including sovereign wealth funds.” This, of course, is the trade in debt where bundled and securitized microfinance loans can be a profitable venture. But such an enterprise also requires the active construction of bottom billion markets. It is thus that conference sessions led by representatives from MasterCard Worldwide and Experian North America wrestled with the task of how best to extend financial services to the “underbanked,” those with the “thin files.” After all, as one presenter argued, “the scoreable unbanked were the next avenue of growth,” and this meant that “credit scoring” had to tackle these “risk frontiers.” Especially prominent at the conference was Moody’s Research Lab, a “research incubator” recently established within Moody’s Corporation and providing credit ratings for debt instruments and securities. The task of the lab is to map the risk frontiers associated with hitherto unbanked markets. This, too, was seen to be “responsible” finance.
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- All descriptions and quotations related to the 2011 Microfinance USA conference come from my field notes. I was an attendee and plenary speaker at the conference. For webcasts of selected sessions at the conference, see www.microfinanceusaconference.org/videos-2011/.
- Ananya Roy, Poverty Capital: Microfinance and the Making of Development (New York: Routledge, 2010).
- Michael Kinsley, Creative Capitalism: Conversations with Bill Gates, Warren Buffett, and Other Economic Leaders (New York: Simon and Schuster, 2008).
- C. K. Prahalad, The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits (Upper Saddle River, N.J.: Wharton School Publishing, 2004).
- Jamie Peck, Constructions of Neoliberal Reason (New York: Oxford University Press, 2010).
- Patrick Joyce, The Rule of Freedom: Liberalism and the Modern City (New York: Verso, 2003), 261.