The article by Prahalad and Hart

I found the article by Prahalad and Hart to be very interesting. In my Social Studies 11 class we study world living standards and one of the videos that I often show my students is Gwynne Dyer’s, “The Bomb Under the World” . In it he actually looks at the efforts of Hindustan Lever to tap into the huge market made up of the poor, rural population. The whole idea of small profit margins combined with sheer volume of consumption made for an interesting argument. Dyer also made the point that in the developing world, people are becoming more aware of the consumer items the developed world has easy access to. With this increased awareness comes a greater desire to share in that consumer wealth. The video is a little out of date (1994) but much of what he says rings true. It is interesting to note that during the filming of this video terrorists bombed the Bombay stock exchange and Dyer made the comment that it wouldn’t be long before the focus of terrorism shifted to the developed world.




1 David Vogt { 09.27.08 at 2:05 pm }

One scary current manifestation of this is China, where an amazing consumer awakening has clearly and tragically outpaced any regulatory capacity for quality, safety, etc.

And more alarmingly — and simultaneously at the very other end of the economic food chain — the entire global banking system has been imperilled by the greed-driven expansion of an investment marketplace without adequate oversight.

Both are examples of rapid market growth driven by unchecked greed — is rapid growth therefore the Achilles heel of the capitalist system?

For an even more philosophical question, if greed is the essential fuel of the corporate world, is this a “bad” thing and should we be looking for alternative fuels, or do we simply need to do a better job of buttoning it up and keeping it respectably covered? Unlike oil, humanity will never run out of greed…..(sorry for the mixed metaphors!!).

2 Jarrod Bell { 09.27.08 at 6:52 pm }

I had the opportunity to listed to Gwynne Dyer when he came to my school in my first year of teaching in 2002. Definitely focused on the new cold/hot wars that were on the horizon. Quite astute.

I would think that rapid growth would be the goal of a capitalist system instead of its apparent Achilles heal, interesting that it along with unchecked greed would be the possibly demise of the current status quo.

Sort of related to oil and humanity that you mentioned, I heard a good one today at a board meeting… We shouldn’t reduce our carbon footprint to save the planet, we should do it to save ourselves as the planet will survive regardless.

In the end the financial system will always change, but it is up to us to determine whether that change is dramatic and catastrophic. I’m interested to see if the American people will come out with ownership in these banks and companies they are about to prop up or whether they will simply own more debt than they already have.


3 Gillian Gunderson { 09.28.08 at 8:18 pm }

Greed is certainly in unlimited supply!

Corporations are driven by profit and those doing the driving are rewarded in the short term (more metaphors!). The long term is covered by golden parachutes. There is no real incentive to not be greedy, so we shouldn’t be surprised when people are.

I’m not sure about covering it up, however. Here’s a thought: some traditional “justice” systems, I believe, were based on the thought that all humans would naturally do various things – not good or evil but just human. The goal wasn’t prevention of “evil”, but rather “it will happen, so this is what everyone will do when it impacts someone negatively”. Restorative justice.

The only restoring that seems to be done these days is bailing out the ones that have done the harm!

4 Kenneth Heales { 09.30.08 at 7:50 pm }

Interesting that you mention China, David. I just showed my students a Nova documentary yesterday called, “China Revs Up” based on the very topic you are talking about. It was interesting to see that emissions standards for vehicles in China made by major auto companies (GM, Chrysler, Volkswagen, etc.) are far below those that would be expected in Europe and North America. The point was made during the video that if China really wanted to enact stricter emission standards those same companies would be forced to conform because of the sheer volume of potential buyers that exist in China.
The growth of consumerism in the rapidly industrializing countries of the world presents a whole new problem. Rees and Wackernagel once pointed out that if the rest of the world consumed at the rate of North Americans then we would require the resources of three earths. That’s a scary thought because it is becoming obvious that there is a real desire on the part of people in those countries to “catch up” to the developed world. The other point that was made by Dyer was that if the developing world wants to consume at the same level as the developed world, what right have we to deny them? I know from an environmental standpoint the point could be made that denial is the right thing to do for the planet. What Dyer suggests is that for the developing world to acquire more, the developed world will have to learn to live with less so that we can achieve some sort of global balance.

5 nancy castonguay { 10.07.08 at 11:10 am }

I understand Prahalad and Hart’s article, however, I believe that rapid growth in the developing world is in fact contributing to global chaos…

As more people rise above the poverty lines, they want to get into cars, use cell phones… in other words, catch up on the industrialized countries as someone mentioned above…

trouble is, there is only so much cheap energy to go around… so many resources to go around… China’s oil demands are fueling the Darfur conflict, and thigh demands for lithium, for example, is fueling conflict within China itself (control of resource-rich Tibet)…

In fact, the burning desire of developing countries to emulate the West is promoting development that is not at all sustainable… Tata Motors comes to mind…

So I am wondering, while Prahalad & Hart argue that opening the global economy to tier 4 will result in growth and prosperity in all areas, how this can be accomplished given the ‘greedy’ nature of human beings…

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