economics

Helping The Crowd Put Their Money To Work

Randy J. Hunt's picture
Randy J. Hunt
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The power of fundraising is in your hands

Randy J. Hunt interviews John Pratt from Fundable via telephone on May 18th, 2007

"Your number showed up as 12345."
"I'm calling from Skype," I replied. How appropriate, crowdsourced bandwidth for a VOIP call.

Brisk and to the point, John Pratt evinced a convincing enthusiasm about the tool he's created to help groups of people use their money in powerful ways. John co-founded Fundable.org with Louis Helm in 2005. Exactly where the idea came from, he says he's not sure. He had been studying political science and social theories around the time he and Louis decided to build the site.

Randy Hunt: Q: What does fundable do for groups of people, "the crowd," if you will?

John Pratt: Fundable helps people coordinate group purchases and fundraisers.

For example, we had a guy who organized a surplus buy of microphones. The minimum order from the company was $10,000 and each microphone cost $250.00. Now, for most people, $10,000 is a lot of money. This guy takes on a lot of risk if people fail to follow through. He might get stuck with a bunch of microphones he doesn't
need. So, on our site he set a goal of $10,000 in pledges and told everyone, "If we collect $10,000 for microphones, I'll buy from this company and we'll each get what we want a lot cheaper than we could have otherwise. If we don't meet our goal, no one pays anything."

5/25/07

Economics of Open Sourcing

Maurreen Skowran's picture

Eric S. Raymond is a programmer who wrote "The Cathedral and the Bazaar":
http://www.catb.org/~esr/writings/cathedral-bazaar/

It includes an economic explanation of why open-source programming works, "The Magic Cauldron":
http://www.catb.org/~esr/writings/cathedral-bazaar/magic-cauldron/index....

He addresses the "Tragedy of the Commons'' here:
http://www.catb.org/~esr/writings/cathedral-bazaar/magic-cauldron/ar01s0...


Poor in the US? Well It's Your Own Fault...

Just “get married and work longer hours,” says Rep. Jack Kingston, a Republican from Georgia. While the House was debating increasing the minimum wage, Kingston said raising the minimum wage would do nothing for poor Americans. Instead, if people marry and work longer hours, “they would be out of poverty,” he said. “It’s an economic fact.” Hmm. Well I’d like to see the data that backs that up, but as usual the Republicans would like to reduce every problem to idiotically simple dualistic terms and get home in time for dinner. In fact, Representative Kingston is pissed off that the Democrats won’t let him cut out of work early and leave for home on Thursday instead of Friday. Clearly, he says, “the Democrats don’t care about families.” because they expect him to stay at work and serve the constituents who elected him. But that is a whole different argument. Let’s go back to the poverty comments.

In 2005 the poverty level for a single adult was considered to be $9,570. A person who works 40 hours per week at minimum wage would earn $9,888 before taxes. After taxes are deducted, a full time minimum wage job in the US would put a single individual officially below the poverty level. Working more hours, even if it’s feasible for the worker, usually isn’t an option since employers who only pay minimum wage tend to discourage their workers from working overtime so they don’t have to pay them time and a half. Certainly the more wage-earners in a household the better off all living there will be, so the Representative is right about that, but if both mom and dad work full-time who takes care of the kids? They are supposed to be married and raising kids, the Republicans say. Also then you need to deduct the cost of reliable child care, a significant expense, from their combined income. Millions of people are already living in extended families and makeshift collectives to try and make ends meet and they still can’t do it. Skyrocketing housing costs, utility costs, fuel costs and healthcare costs mean that millions live in poverty, and millions more live on the edge of it. As the Republicans’ pro-big business agenda continues to squeeze the middle class out of existence more and more people who had a tenuous grip on middle class comfort are falling into poverty.

In my home city of Chicago, a recent report compiled by an advocacy group put the homeless population of Chicago at a whopping 73,000 people between July of ‘05 and June of ‘06. There are more than 21,000 people sleeping on the streets every night, and more in shelters or in temporary housing. The report, by the Chicago Coalition for the Homeless, was the first to take into account people who are technically homeless but not on the street, such as people temporarily bunking with friends and family. Bouncing from couch to couch can impact these peoples’ ability to find work or to keep a job, especially if they are dependent on public transportation. Of those 73,000 homeless 24,600 are children. There are more than 9,000 children sleeping on the streets in Chicago every night. There is currently a battle being waged by our local utilities to be allowed to increase prices as much as 55%, if they win you can expect the number of homeless and hungry in Chicago to skyrocket even higher.

In New York City, 1 in 7 households face “food insecurity”. In the last two years they have seen a 17% increase in need for food assistance for people in NYC. Not just in families below the poverty line either. Static wages, job loss, and increases in cost of living are causing employed, previously financially stable people to look to charities and food pantries to supplement their food supplies. Since they can’t control things like rent increases, utility increases, gas and transportation costs, or inflation the first place that people usually cut back on their spending is the food budget, the one expense they have some control over. But school lunch and public assistance programs are getting cut to pay for the war in Iraq, and schools are serving cheap and nutritionally deficient food so the families who depend on those programs to give their children at least one solid meal a day are paying for those programs with their children’s health.

Americans have always reviled their poor. People usually don’t outright declare their belief that the poor deserve to be poor (unless they’re Republicans) but it’s always there in the way poverty is handled in this country. Work is equated with worth, and if you don’t work, well then you must be somehow deficient or lazy. The “working poor” are disdained, but tolerated because hey, at least they’re trying. The truly destitute are just worthless in American society.

So why do we hate our poor? It goes back to the very beginning of this country and the first settlers. The Puritans were persecuted in Europe for their religious beliefs so they came here, and brought with them the fervent Protestant ideas of one John Calvin, a 16th century Protestant Reformer who had radical ideas about God. He believed that as a result of Predestination poor people were poor as punishment from God, and by being poor they had been marked by God for their flaws, and should be outcast from society for their failings. Predestination states that God has already decided the fate of each person, and that nothing which person that does will affect the outcome. God decided at the beginning of time who he would save and who would not be saved, and the Puritans and other Protestant groups believed that God showed his favor by bestowing success and material wealth. People who prospered had been blessed by God and were therefore good, people who were poor were marked by God and therefore bad.

Now some of you who are quick on the draw are already seeing the contradiction of Predestination, how can an individual have God-given free will if that person’s life has already been decided upon by God? The Puritans (and other like groups) believed that salvation of the soul was entirely decided upon by God, an individual’s actions whether good or bad would not impact whether or not the individual would be saved by God. In the Puritan view God controls everything and is ultimately responsible for all outcomes, but those who are godly use their free will to choose to cooperate with God’s plans, and so they are given grace and work in conjunction with God. They are then rewarded with material success as a sign of their cooperation with the will of God. The ungodly use their free will to choose to not cooperate with God, and he punishes them with misfortune. Ultimately, God still is control of everything, but the individual still chooses whether or not to cooperate with God’s plan.

While we claim a separation of Church and State in the US we can never really separate ourselves from the religious beliefs of the founders of the country because their beliefs framed the entire system we have in place today. Even if we no longer consciously think of poverty in Calvinist religious terms, we still make the same fundamental assumption that poverty is the mark that a person has some sort of moral failing. They are either lazy, or spend what money they have on sin, or are sexually promiscuous, or something. It is their own fault they are poor and our society allows for little other discussions of the root causes of poverty.

We need to change the framework of the debate about poverty. The number of Americans living in poverty is only going to increase in coming years as we recover from the cost of the Iraq war and the cost of having the Bush administration in the White House for eight years. Our society treats the poor as inherently inferior persons—if they weren’t inferior they would be wealthier. People who have always been poor tend to believe what society tells them, that they are poor because it is their own fault. The middle class people who are falling out of middle class into poverty come into it without that belief, and with the advantages of a certain sense of entitlement and usually a certain level of education. Hopefully these people can be the catalyst to reframe the debate about poverty. Until we change the nature of the debate and recognize that people are poor as a result of market forces, the economy, and other outside factors and not as a result of their effort or their worth they will continue to suffer. And in a country with the resources that this country has, that is beyond disgraceful.


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