Romanticizing the Poor Harms the Poor

24 Pages Posted: 26 Aug 2007 Last revised: 13 Dec 2007

See all articles by Aneel G. Karnani

Aneel G. Karnani

University of Michigan, Stephen M. Ross School of Business

Date Written: October 2007

Abstract

A libertarian movement that emphasizes free markets to reduce poverty has grown strong in recent years. It views the poor as 'resilient and creative entrepreneurs and value-conscious consumers'. This romanticized view of the poor is far from the truth and harms the poor in two ways. First, it results in too little emphasis on legal, regulatory, and social mechanisms to protect the poor who are vulnerable consumers. Second, it results in overemphasis on microcredit and under-emphasis on fostering modern enterprises that would provide employment opportunities for the poor. More importantly, the libertarian proposition grossly under-emphasizes the critical role and responsibility of the state for poverty reduction.

Keywords: Poverty reduction, bottom of the pyramid

JEL Classification: M10, I30

Suggested Citation

Karnani, Aneel G., Romanticizing the Poor Harms the Poor (October 2007). Ross School of Business Paper No. 1096, Available at SSRN: https://ssrn.com/abstract=1008333 or http://dx.doi.org/10.2139/ssrn.1008333

Aneel G. Karnani (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

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