Whole Earth Discipline

by Brand, Stewart

The slums of the world teem with invisible private schools of just a few teachers selling their services directly for pennies. As Clive Crook reported in the Atlantic, “The parents of full-fee students, desperately poor themselves, willingly subsidized those in direst need. On the whole, dime-a-day for-profit schools are doing a better job of teaching the poorest children than the far more expensive state schools.”

  This book was finished before the full effects of the world financial crisis of 2009 could be studied. Did the informal economy in the world’s slums offer a refuge from it, or did people there suffer more than anybody? (A 2009 report in the Wall Street Journal said that in the developing world, “people are landing in the informal sector, which has become a critical safety net as the economic crisis spreads.”) Were some people driven further into the crime economy? For that matter, how did global crime do? Did the rate of urbanization slow down or speed up? Here’s my prediction from March 2009: significant growth in the informal economy from more people retreating into it; significant growth in the crime economy, because it’s always ready to exploit chaos; no change in the rate of urbanization. How wrong was I?

  • Infrastructure may be hidden in the formal world, but not in squatter cities. Wires are strung everywhere, carrying pirated electricity and cable TV; plastic pipes snake in all directions, illegally distributing water. It is do-it-yourself infrastructure. AES, a global energy company serving the developing world, invited me to a conference in Buenos Aires in 2006. The company was trying to convert electricity pirates into paying customers in Latin American slums, beginning with Caracas in Venezuela. They said it took months with the slum dwellers to build trust, because “they’ve been lied to by everyone”; but once the company had their trust, it was golden. Bootleg electricity, they learned, was annoyingly unreliable for the users, and it was “dirty”: its wave variability would routinely fry TVs and refrigerators. Also it was dangerous; four people a month were fatally electrocuted messing around with the neighborhood’s amateur power lines.

  “There’s plenty of money in the slum,” AES people told me, but for any particular household, the income is too irregular to manage a monthly electric bill. So AES reinvented the token electrical meter, similar to the British system used after World War II. When you have some money, you buy some of the coinlike tokens and feed them, as needed, into your meter for a set amount of clean, reliable electricity. To promote solidarity with the Caracas slum community, AES hired some of the more skilled pirates to help install the system. AES was trustworthy, and its new customers were trustworthy, but President Hugo Chávez turned out not to be. After initially supporting the effort, he nationalized the system in 2007 and threw out AES. (The company took its lessons learned and its Caracas team to install a similar system in São Paulo.)

  AES, among many other corporations, was inspired by C. K. Prahalad’s The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (2005). The book spells out how companies can reach the world’s 4 billion poor and deliver goods and services at the interface between the formal and informal economies. Prahalad writes that the poor shop after seven P.M.; they buy in tiny quantities; they welcome relief from the premium prices they often have to pay to slum (sometimes criminal) monopolies; and they are comfortable leapfrogging to new technologies.

  Corporations are right to pay attention to what is now referred to as the BOP—bottom of the pyramid. A large portion of humanity on the loose, trying new things in new cities, is a lot of potential customers, collaborators, and competitors, and while the income of the poor is currently small, it is growing fast. And the aggregate numbers are formidable. A 2007 book, The Next Four Billion, declares:The 4 billion people at the base of the economic pyramid—all those with incomes below $3,000 [per year] in local purchasing power—live in relative poverty. Their incomes in current U.S. dollars are less than $3.35 a day in Brazil, $2.11 in China, $1.89 in Ghana, and $1.56 in India. Yet together they have substantial purchasing power: the BOP constitutes a $5 trillion global consumer market.

  And an enormous labor market. Researchers for The Challenge of Slums were surprised to discover that global corporations, thanks to global oversight by home governments and NGOs, often provide the best-paying jobs and best working conditions in developing-world cities, raising the standard for everybody.

  • Everyone in an informal economy lives in the gray area between legitimacy and criminality; over time they can go either way. Smart governments, NGOs, and corporations make it easy for people to move gradually toward legitimacy, because when they are more easily drawn into the criminal economy, it can be a disaster. A sense of the immense scale and damage of the criminal market can be found in the book Illicit (2005), by Moisés Naím. The total global traffic in drugs, arms, illegal workers (including sex workers), protected animals and plants, looted artifacts, stolen intellectual property, illegal money flows, etc., adds up to between $1 trillion and $3 trillion a year. The informal economy in the world’s slums provides superb cover and a huge workforce for the growth of crime.

  Many slums are governed by local organized-crime groups—sometimes responsibly, sometimes destructively, usually a combination of the two. One of the most pathological situations in the world developed in Brazil, where drug lords long ran the favelas in a relatively benign way except when they battled with police or each other. Banks in the favelas were never robbed, for example. But in the past decade, a new underground force of national scale has emerged: the Primeiro Comando da Capital, or PCC. It is a large, highly disciplined group run from inside Brazil’s prisons via cellphones, capable of massive swarming attack. In May 2006 and again in July, the PCC paralyzed the entire city of São Paulo with a series of coordinated violent attacks. Why? Just to prove they could, apparently. William Langewiesche, writing in Vanity Fair, saw the PCC as part of a much larger phenomenon, which he called the “feral zone”:That zone is a wilderness inhabited already by large populations worldwide, but officially denied and rarely described. It is not a throwback to the Dark Ages, but an evolution toward something new—a companion to globalization, and an element in a fundamental reordering that may gradually render national boundaries obsolete. It is most obvious in the narco-lands of Colombia and Mexico, in the fractured swaths of Africa, in parts of Pakistan and Afghanistan, in much of Iraq. But it also exists beneath the surface in places where governments are believed to govern and countries still seem to be strong.

  The PCC may control half the slums in Brazil, but yet another force has recently emerged—militias organized as vigilante groups within some favelas. Armed combat goes on among drug lords, the PCC, the police, and now the militias. In her thirty-year study of Rio de Janeiro, Janice Perlman observed: “In 1969, people were afraid of their homes and communities being removed by the government. Today they are afraid of dying in the crossfire between drug dealers and police or between rival gangs. . . . More than one in four people (27 percent) said that some member of their family had died in a homicide.”

  People who make their life in a feral zone can take no account of environmental issues or climate change. If the feral zone is still growing when climate change begins to disrupt societies, a feral response could multiply the problems and lead to social-chaos wars as well as resource wars. We would be back in the world of “constant battles,” at multiple levels.

  • It doesn’t have to go that way. “San Francisco used to be a shantytown,” Rob Neuwirth pointed out to a San Francisco audience. All the world’s cities were shantytowns in their early days. The process by which they became proper cities is being recapitulated now in the world’s squatter cities, only much faster this time and on a far larger scale. All that the keepers of the formal economy have to do, Neuwirth says, is meet the squatters halfway—help them secure their tenure and give them time to gradually join the formal world, which will no doubt be reshaped by their joining it. Program by program, nation by nation, the world is learning how to engage the boundless resourcefulness of urban squat
ters.

  One idea put forward early was Hernando de Soto’s. In his seminal 1989 book, The Other Path, he was the first to honor the way the informal economy works, based on research in the squatter communities of Lima. His theory was that squatters could break out of poverty if only they could get bankable title to their shacks. The idea has been tried, but it mostly doesn’t work in urban slums: The practice doesn’t help with credit, it encourages building owners to become absentee landlords, and it attracts rich raiders. Neuwirth wrote in Shadow Cities: It doesn’t matter whether you give people title deeds or secure tenure, people simply need to know they won’t be evicted. When they know they are secure, they build. They establish a market. They buy and sell. They rent. They create. They develop. Actual control, not legal control, is the key. Give squatters security and they will develop the cities of tomorrow.

  The lesson I draw is that any practice that leads to treating houses mainly as property tends to destroy community, and any practice that treats them mainly as homes preserves community.

  The transition from slum to ordinary urban neighborhood goes best if it is gradual and carefully finessed to local conditions by all the players—dwellers, government, NGOs, and companies. According to a 2008 article in Toronto’s Globe and Mail:“The best plans generally let the slum dwellers themselves make the main decisions in planning their future. You should provide clean water, toilets, electricity, garbage collection and disposal, and maybe let people build their own houses if they can, using materials that you can provide,” says Aprodicio Laquian, the Filipino-Canadian planner who practically invented the idea of slum-dweller-designed urban rehabilitation in the 1960s. . . . These sorts of schemes, known as “slum upgrading” or “sites and services,” have been at the heart of the most successful urban-renewal projects of the past 40 years.

  As the 2003 UN report points out, “When more than half of the urban population lives in them, the slums become the dominant city.” A city planet has every reason to learn to understand slums, to respect the people there, and to help clear the way for them to become full citizens. That in turn helps the world, for practical as well as ethical reasons. There’s more to be said about what the world gains from its urban majority, and how.

  Live-linked footnotes for this chapter, along with updates, additions, and illustrations, may be found online at www.sbnotes.com.

  • 3 •

  Urban Promise

  The city is all right. To live in one

  Is to be civilized, stay up and read

  Or sing and dance all night and see sunrise

  By waiting up instead of getting up.

  —Robert Frost, A Masque of Mercy

  Cities accelerate innovation; they cure overpopulation; and while they are becoming the Greenest thing that humanity does for the planet, they have a long way to go.

  • Motivation plus ingenuity, when manifest in a hell of a lot of newly urban people tired of being poor, drives innovation of world-changing originality and scale. The textbook case is what’s been happening with cellphones lately.

  When the BBC sent a reporter and film crew to Kenya in 2007, they found a cellphone-summoned flash mob of squatters surrounding bulldozers that were about to force evictions. They found a farmer using what he calls his new middleman—his cellphone—to compare tomato prices in several remote towns. They found cattle ranchers checking with their far-flung herders by cell. A young woman in Nairobi said her cell was now her office: “It allows people to be able to own themselves,” she said. “It’s as big as fire, the wheel, and the railway.” Cellphone text messaging is spreading literacy. Cellphone directness works around government graft. Economic development and social change follow the cell towers wherever they go.

  The poor of the developing world have turned cellphones into currency. Technology researcher Alex Pentland at MIT reports:In some parts of Africa and south Asia, banking is done by moving around the money in cellphone accounts and people pay for vegetables and taxi rides by SMS [Short Message Service—texting]. Because remanufactured cellphones cost $10 in the developing world and incoming messages are free, every stratum of society is connected. Day laborers, for instance, no longer hang around a street corner waiting to be picked for work. Instead, job offers arrive by SMS from a computerized clearing house. The International Telecommunications Union estimates that in the poorest countries each additional cellphone installed adds $3,000 to the GDP, primarily due to the increased efficiency of business processes.

  The great monetizer is prepaid SIM (Subscriber Identity Module) cards—a business worth $3 billion across Africa in 2007, run by local entrepreneurs. SIM cards are sold at vegetable stands and the like, along with “scratch cards” that reload the SIM with additional minutes. Some people carry just a card and borrow a phone when needed. Safaricom, in Kenya, has a service called M-Pesa that lets the cell work as an ATM; to send someone money, you text-message the appropriate code to them, and they get cash from a local M-Pesa agent. Cellphone minutes are traded by phone as a cash substitute. Credit card payments are made by cellphone. Remittances from relatives overseas come by cellphone. (Amounting to about $350 billion a year these days, remittances are expected to reach $1 trillion soon; in some developing countries, the remittance total is already higher than foreign aid and foreign investment combined.)

  A South African company called Wizzit offers bankless banking via cellphone, with services I wish we had in California. You can open an account in two minutes anytime, anywhere. You can transfer money from your Wizzit account to virtually any other bank account, pay your bills with it, and get cash at any ATM worldwide. Its service centers are multilingual. Children can have accounts. Services similar to those of M-Pesa and Wizzit are offered by GCash in the Philippines.

  There are cellphones with software for Muslims: Five times a day the cellphone calls the user to prayer and then shuts itself off for twenty minutes. An NGO in the Republic of the Congo provides smart phones “to local teachers, elders and business leaders so that they can report incidents of children being drafted as soldiers.” Some phones include games that teach languages. Nokia is producing cellphones that have seven address books, for multiple users.

  Cellphones are demonstrating how continent-scale “incremental infrastructure” can be built, writes Harvard-based blogger Ethan Zuckerman. All an entrepreneur needs is one cell tower, which can be financed by selling handsets to local customers. As revenue comes in, another tower is built. Web connectivity can be added, one satellite dish at a time. Before long, the locals can make money doing data entry for some American company or by providing translation service. The proliferating cell towers and cellphone battery chargers need electricity, which is currently supplied with expensive inefficiency by diesel-fueled generators. Zuckerman expects incremental electricity microgrids to follow the cell towers.

  • For his fine book on the origins of the cellphone revolution, You Can Hear Me Now (2007), Nicholas Sullivan spoke with Iqbal Quadir, founder of MIT’s Legatum Center for Development and Entrepreneurship. Quadir, who grew up in a Bangladesh village, was working in a New York finance office when his computer network went down. “I realized that connectivity is productivity, whether it’s in a modern office or an underdeveloped village,” he recalls. So in 1994 Quadir set about building a cellphone network for Bangladesh. Allying with the Grameen Bank—the microfinance organization that earned Muhammad Yunus the Nobel Prize in 2006—he seeded the country’s towns and villages with “phone ladies” who rented out time on their cellphones to neighbors. By 2008 Grameenphone had over $1 billion in revenues, and Iqbal’s brother, Kamal Quadir, had created a cellphone-based virtual marketplace for Bangladesh. Called CellBazaar, it enables massive direct commerce for goods and services costing as little as two cents. “Grameen Bank has an impact on the poor, Grameenphone on the entire economy,” said Muhammad Yunus. Sullivan’s book chronicles similar revolutions in Africa, in India, and in the Philippines.

  The boundless resourcefu
lness of the poor is evident in slides shown at conferences by Jan Chipchase, Nokia’s field ethnologist of tech improvisation in the developing world. He has photos from Indian slums of whole streets of cellphone repair shops, where local talent has reverse-engineered every handset in the world and produced illustrated repair manuals in the local language. One of his slides shows a shabby doorway in a Uganda slum. Over the turquoise-painted door is a hand-lettered “077399721.” It’s not a street address, it’s a cellphone number. The world’s slums are the first urban environments to shape themselves around cellphones.

  • The bottom of the pyramid is no longer just an overlooked market; it is a creative engine for national economies. “From essentially zero,” writes Joel Garreau at the Washington Post, “we’ve passed a watershed of more than 3.3 billion active cellphones on a planet of some 6.6 billion humans in about 26 years. This is the fastest global diffusion of any technology in human history. . . . Cellphones are the first telecommunications technology in history to have more users in the developing world than in the West.” American travelers are often shocked to find that cellphone connectivity is better in developing countries than in the United States.

  Technology historian Kevin Kelly draws an interesting conclusion from this:A decade ago many folks who like to worry about the advance of technology were worried about the “digital divide.” This phrase signified the unfair gap between those who had computers and the internet and those who did not. The question was usually framed in these words: “What are you going to do about the digital divide?”