Read Chapter 1 for More than Money

MORE THAN MONEY

There are a thousand hacking at the branches of evil to one who is striking at the root.

—Henry David Thoreau

IT’S NOT ABOUT THE MONEY! In the global wars on poverty money has served as both the primary weapon and chief foot soldier for both academics and practitioners. If we deploy the right amount to the right place at the right time, the right things would happen, poverty would abate, and misery give way to human happiness. Development economists, business scholars, social entrepreneurs, and thought leaders all trumpet the right amount and mix of investment and spending by government, businesses, and consumers, as critical to meaningful gains by the world’s poor.¹

I like Thoreau’s observation. Most of the billions, or trillions, of dollars thrown at the poverty problem ends up in the branches—alleviating the symptoms of poverty—but little gets at the root and creates lasting prosperity for individuals. Money doesn’t eliminate poverty. Money fails, primarily, because it does little to develop or encourage self-reliance; I’ll make a case in these pages that self-reliance leads to a lasting solution to poverty. First, however, let’s truly understand the fascination with money as the key to battling the curse of poverty.

The focus on money conforms to our conventional wisdom about what poverty is, and by implication how it can be overcome. The World Bank’s operating definition of poverty tells us that

Poverty is “pronounced deprivation in well-being.” The conventional view links wellbeing primarily to command over commodities, so the poor are those who do not have enough income or consumption to put them above some adequate minimum threshold. This view sees poverty largely in monetary terms.²

Specialists and lay people alike may intuitively realize that it takes more than just money to create meaningful change, but requests for aid—often urgent—in monetary terms often force other critical conversations to the background. The “conventional view”—deeply engrained into our mental maps of poverty—means that the conversations about strategic solutions quickly devolve into tactical talk about fund raising, potential donors, and expected receipts.

Money also provides a seductively convenient soldier to deploy. When we move past the simple symptoms of want we begin to see the complex causes of need, and those deeper causes constitute what planners refer to as wicked problems: ones that defy definition, have multiple causes and potential remedies, and no definite or optimal solution.³ At one level, writing a check is easier than finding the causal roots in the quagmire of wicked complexity. At a deeper level, money-as-the-solution appeals to a deeper belief that money is the apparent solution to our own problems, so giving money to the poor should help them with their problems. Money acts as a quick palliative for the pain of the destitute.

For some, maybe many, money represents not only a convenient way to engage in a worthy cause; it also consoles the conscience. Living lives at or near the top of the economic pyramid, our drive for justice, or perhaps our sense of guilt over our abundance, encourages us to do something. But again, doing something requires getting our hands dirty and admitting our weakness in the face of an intractable problem. Giving money relieves our feelings of helplessness and hopelessness. Money becomes a palliative for the pain of the donor.

Money may conform to convention, provide a convenient and consoling way to get involved. What it hasn’t shown, at least to date, is a curative effect on poverty. That’s a bold claim, one I’ll back up in a moment, but it will prove helpful to think more about poverty and the different levels where it exists. We can think of two overarching types of poverty, Big P and little p.

Big P poverty describes poverty driven by macrosocial forces and measured at very aggregate levels. Big P poverty isn’t about people, at least not ones with names and faces; it’s about people as statistics and the metalevel forces that drive them: famine, ignorance, marital and family institutions, political oppression, and war, to name a few. Percentages and aggregates matter in the fight against Big P poverty, the percent of people with clean drinking water, access to sanitation, or secondary education. It’s not about whether the Agbetes of Accra or the Walkers of Window Rock have any of those things. The focus lies in alleviating—mitigating the effects of—poverty but tacitly frames its underlying causes as intractable.

Little p poverty focuses on individuals and families. It’s about the Agbetes, the Walkers, and millions of other people with names, faces, lives, and real needs. Real people live in corrupt or fragile states; they often lack access to formal educational opportunities or participation in the formal economy. The causes of Big P poverty put real people in little p poverty, as do things like physical or mental handicaps, family dynamics, and personal choices. Fighting little p poverty means improving the lives and livelihoods of individuals, one at a time. Little p poverty can be eliminated, individuals and families can move from poverty to prosperity.

If Big P poverty focuses on statistics, then little p poverty concerns stories, the intimate arcs of individual lives. Slicing poverty into Big P and little p does more than provide a memorable metaphor; it highlights that those fighting it will be more effective when their efforts and organizations match the realities operating at each level. We’ll talk more about that throughout the book. The division also illuminates the failure of money to make much of a dent in the global problem of poverty.

Money and Big P Poverty—the Failure of Foreign Aid

The most public debate about money and the fight against Big P poverty features cross-town dueling economists Jeffrey Sachs of Columbia and New York University’s William Easterly. Both admit that foreign aid has proven less than stellar—more like an abject failure—in eradicating poverty and enabling sustained development. Much of the more than $620 billion that USAID has granted or loaned to foreign countries for economic aid from 1946 to 2010 in the form of foreign aid has not delivered anything like an adequate return on investment.⁴ Sachs and Easterly offer radically different explanations and proffer different solutions.

For Sachs the problem lies in the paucity of aid: the problems and shortcomings in developing countries are so extensive that foreign donations are too small to make a difference.⁵ For example, aid to Kenya for health care came to about $100 million per year a decade ago; to build a health system capable of providing substantive care to all Kenyans would cost about $1.5 billion per year, fifteen times the amount earmarked.⁶ Not surprisingly, Sachs calls for a new a massive infusion of aid large enough to get developing countries over the hurdle; we should supersede the big push of the 1960s with an even bigger push in the twenty-first century. Big P poverty requires staggeringly big sums to eradicate.

Easterly proffers the exact opposite explanation: foreign aid has presented developing country leaders with a glut of resources that creates and reinforces dependency, institutionalizing and enshrining Big P poverty into the fabric of these societies in the form of graft and corruption.⁷ Aid to improve the educational systems in Africa, for example, doesn’t lead to economic growth (and may not do much for substantive learning either).⁸ Easterly’s remedy lies in cutting foreign aid and replacing free public money with the miracle of the market; development policies should create a proper set of incentives for investment and private business.⁹ The abstract nature of Big P poverty requires an equally abstract institution, the Big M market, to fight it.

Given the failures of previous efforts, and the seeming inability of many developing markets to adopt Big M market mechanisms, it comes as no surprise that nations, businesses, and individuals express cynicism at worst, or suffer fatigue at best, toward well-intended efforts to attack Big P poverty. One response has been to abandon the focus on large-scale interventions and focus instead at the smallest scale of economic activity.

Money and Little p Poverty—The Unfilled Promise of Microcredit

The fight against little p poverty changed in the mid-1970s when future Nobel Laureate Muhammad Yunus discovered that many of the poor women in the villages of Bangladesh captured only subsistence wages, rather than the market price, for their work.¹⁰ What shut the women out of the market? Their inability to purchase the small amounts of raw materials on their own; they lacked the financial capital and relied on a middleman. Yunus lent $27 to a group of forty-two women and initiated the microcredit movement.

Undoubtedly microcredit has helped millions improve their livelihoods and given them a measure of control; unfortunately, it has also become a panacea for solving the problems of the poor. I attended a lecture given by a high-profile management guru who asked: “[Do] you want to eliminate poverty? Well, just give every woman a small loan and she’ll pull her family out of poverty.” That’s a bold claim.

Does the reality of microcredit match the hype? The best research on microcredit shows that the tool appears to increase income; however, the biggest gains in income come to those who are the best off among borrowers;¹¹ one study found that the poorest borrowers actually saw their incomes decrease.¹² Microcredit produces contradictory outcomes; many borrowers see incomes rise but measures of health, housing, and nutrition decline. A devil’s bargain: borrowers appear forced to trade off economic or social gains.¹³

One challenge lies in the fact that microcredit is micro—small scale. Financing helps individual entrepreneurs purchase raw materials or other consumables but often leaves no slack to fund asset purchases or employees.¹⁴ Microcredit may facilitate individual self-sufficiency, but the model doesn’t lead to job creation or growth in business scale; the ripple effects of microcredit don’t extend out very far into the broader community.¹⁵

Whether fighting Big P or little p poverty, a financial focus fails to eliminate poverty because at best it helps people have more; it can’t help them be more. Having more relates to external things: what people own, possess, or can access. Being more happens inside; it captures capabilities, character, and desires that help people reach their full potential. Money may be the ticket that helps us have more, but being more requires more than money. Having more alleviates the suffering of poverty; being more eliminates the situation of poverty.

This book is about self-reliance, its role in eliminating little p poverty and helping people become more. Self-reliance interacts with five elements in our economic and social lives that I refer to as types of capital. The book presents and argues a simple thesis for those interested in eliminating little p poverty: real development—the kind that permanently lifts people out of poverty—requires harnessing and focusing five different types of capital in ways that enhance and leverage people’s self-reliance.

SELF-RELIANCE AND THE FIVE TYPES OF CAPITAL

What is real development and how does it influence self-reliance? Jane Jacobs was not a professional economist but a writer and activist. In The Nature of Economies she offers a wonderfully concise way to understand real economic development as opposed to mere growth.¹⁶ Growth consists of a quantitative change in the output of an economic system, while development captures a qualitative change in the types of outputs of that system. Growth is about having more, development about being more.

For some, talk of self-reliance evokes images of Jim Bridger, the early nineteenth-century trapper who scratched out a meager existence in the rugged and untamed American West. Living and working alone, Bridger, like most Mountain Men, relied solely on his own skill, strength, and cleverness. Self-reliance, as I’ll discuss at length in Chapter 2, captures something vastly different; two distinct, yet related, elements of people’s economic actions: the inputs they use and outputs they produce. Self-reliance represents both a disposition, a bundle of beliefs and attitudes that drive behaviors, and a condition, or configuration of assets and resources that result from those behaviors. We all have the potential to become self-reliant, and our natural tendencies to be so will either be nurtured or hindered by the social settings in which we live.

Those social worlds provide sets of resources that strongly influence both the disposition and configuration that defines self-reliance. Individuals and families employ and leverage these resources to produce economic income as well as social satisfaction. I describe them as types of capital because they are durable sources of wealth that produce wealth. The types of capital are:

Institutional: The large social structures that provide meaning and structure to social life.

Social: The resources available to us by virtue of our relationships with family members, friends, or associates.

Human: Knowledge, skills, and attitudes that produce tangible outcomes and create wealth.

Organizational: Collective social endeavors we engage in or interact with that harness the powers of cooperation between and competition among people.

Physical: The tangible, and financial, resources we employ to produce products or services or exchange with others to create value.

To illustrate the role of the five types of capital and self-reliance in creating real, sustainable development, let’s look at what may be history’s greatest episode of development: the Industrial Revolution. More specifically, let’s consider a single actor who made a big difference: James Watt, developer of the steam engine, the machine that powered the industrial economy. We’ll return to Watt’s story throughout the book to illustrate in greater detail each type of capital, but for now I’ll sketch out the basics of the fascinating story of Watt’s steam engine.

James Watt’s Steam Engine

There are at least two great myths about the Industrial Revolution: that it was a revolution and that it began with James Watt’s invention of the steam engine in the 1760s. The term Industrial Revolution appeared well after the supposed “revolution” began and didn’t become the description de jour until historian Arnold Toynbee popularized the term almost a century after the supposed revolution took place.¹⁷

Economic historians see industrialization beginning in the thirteenth century, with the Magna Carta and the gradual rise of the rule of law throughout Europe playing a starring role.¹⁸ Religious historians argue that the spirit of inquiry in thirteenth-century Christian theology that re-emerged with Thomas Aquinas enabled scientific progress and discovery. Military historians point further back to the twelfth-century Crusades, which planted the seeds of large-scale organizations, sophisticated communication and logistics networks, and the development of a banking industry. All these scholars argue that industrialization resulted from social evolution, not revolution.

The invention of the steam engine has been relegated to the stuff of a children’s bedtime story, and legend has it that James Watt, as a very young boy, watched steam lift the lid of a tea kettle at his grandmother’s home and had the epiphany that steam would be a tremendous source of power.¹⁹ James would then spend his life doggedly bringing that boyhood vision to life, first in the laboratory and then in industry. The reality of the steam engine includes trial and error, happenstance meeting, good fortune, and cleverness worthy of the best grown-up novel.

The power of steam had been known since Hero of Alexandria, who made steam-powered toys in the first century A.D., but that technology would lie fallow for more than a millennium and a half. By 1712 Englishman Thomas Newcomen had developed a commercially viable steam engine that became a familiar fixture in England’s coal mining regions by the 1720s. Newcomen’s engine, a huge, stationary steam-powered pumping arm, allowed English coal miners to pump water from their mines and thus pursue coal in deeper veins to fuel an already expanding industrial base.

While a marvel of technology and a quantum leap in industrial development, Newcomen’s engine suffered from two major drawbacks. First, the machine couldn’t be moved. The “engine” was really a large building; once constructed it became the embodiment of fixed capital. Second, the engine wasn’t efficient, as it generated very little power for each ton of coal that fired its boiler. In consequence the expensive giant could be used only where coal was cheap and close—the rural coal regions of England and Scotland. Newcomen’s marvel could fuel only the coal industry, but an engine that could fuel an entire economy would come within a generation at the hands of James Watt.

Scotsman James Watt (1736–1819), the reputed father of the Industrial Revolution, was born a frail and sickly child with a pessimistic and cautious disposition, hardly the traits of the prototypical entrepreneur. His poor health led to a home-schooled education at the hands of his bookish mother and extensive exposure to his father’s business selling navigational instruments. Watt’s father built him his own workshop and provided the tools for young James to develop his skills in metal work. James seemed to have a talent for instrument making, and he would enrich those skills through a much abbreviated apprenticeship in London in the late 1750s.

By 1763 Watt owned a successful scientific instrument manufacturing company and held the position of official instrument maker at the University of Glasgow. One of Watt’s tasks consisted of repairing a small model of a Newcomen engine brought to the university for study. The model failed to work properly, and Watt was assigned to “repair” it; that repair job would change the course of scientific and economic history. He quickly realized just how inefficient Newcomen’s engine was and began to search for improvements.

Watt was by no means an academic, but his fascination with the scientific discoveries of the Enlightenment and his willingness to master the theories of the day would prove vital to the development of his machine. Throughout his career, Watt supplemented his formidable skills as a craftsman and model builder with the best science of the day. He learned first about steam, heat transfer, and productive work—topics we know today as basic thermodynamics but that represented cutting-edge science in the eighteenth century.

In this endeavor Watt had the good fortune to work with Joseph Black, a professor at Glasgow University. Black later lent Watt £150 (about $5,500 in current dollars) based on the strength of his emerging designs and encouraged Watt to approach his friend John Roebuck as the potential of a new engine became clear. Mine owner Roebuck had the financial incentive and resources to push development of the engine forward. Roebuck became Watt’s “angel investor”—to borrow a current phrase. Roebuck’s capital, and his patience in the interminable delays in the process, allowed Watt to create a patentable design for the new engine by 1768.

Roebuck also introduced Watt to William Small, a local physician and scientist, who would in turn introduce Watt to Matthew Boulton. Boulton, a successful Birmingham entrepreneur and manufacturer, became Watt’s business partner, financier, and advisor in 1769 after Roebuck suffered a financial reversal. While Watt would gain fame for his mechanical and technical prowess, Boulton would prove equally ingenious in the business side of their partnership. Today Boulton and Watt grace the British £50 note, a lasting symbol of their joint contribution.

Boulton and Small would prove invaluable in the patent process; their cleverness and political connections helped Watt secure a rather broad patent for a steam engine “concept” and several related off-shoots. Boulton saw the economic potential if Watt could turn the direction of force from his engine 90 degrees; indeed, Watt’s rotary engine moved steam power from the mines to the mills and factories that constituted British industry. Boulton’s Soho Works and organizing abilities facilitated a massive expansion of the scale of the enterprise.

James Watt’s sickly childhood belied a self-reliant disposition. He conquered his pessimistic, cautious nature through a deep-seated sense of moral responsibility to provide for himself and his family. He exhibited a trait psychologists label self-efficacy, the belief that he could master new skills and knowledge. Watt’s story shows us someone willing to invest and work from a long-term perspective. He acquired, husbanded, leveraged, and preserved each of the five types of capital introduced above.

Let’s highlight three other key lessons for economic development from Watt’s work before discussing those five types of capital. First, Watt’s innovation took a long time. Work on the steam began in 1764, but the original patent wouldn’t come for half a decade. It would take three decades for Watt’s engines to finally outnumber Newcomen engines in service. Sustainable development and the innovations that fuel it take time; vision, persistence, strategy, and leadership play outsized roles in bringing projects to fruition.

Second, the title “Watt’s steam engine” pays homage only to the innovator and relegates other critical players to the supporting cast. Watt, the workers in his instrument company, Black, Small, Boulton, and a host of others you’ll meet in Chapters 4 and 9 all played important roles in the process. Take one away and history might look very different. The fight against poverty, and the changes it fosters, is a team sport; sustainable and long-term economic progress won’t occur if individuals and their organizations can’t work and play well with others—that is, if they can’t form, maintain, and grow networks of like-minded individuals and organizations all working toward common goals.

Finally, the market—that marvel that William Easterly sees as the key to real advancement—had ways to judge the superiority of Watt’s engine, and that market led industrialists and others to allocate resources to his designs. Watt developed the metric of horsepower so that customers could compare the work capacities of different engines. In the long-term fight to eliminate little p poverty, decision-makers, donors, and other partners clamor for, and find relief in, clear measures with which to judge which projects work.

With these lessons laid out, let’s turn our attention back to the five types of capital and provide more of an introduction to these critical cognitive, social, and physical resources that create and reinforce the disposition and condition of self-reliance.

GOING DEEPER

The story of Watt’s steam engine illustrates how each of the five types of capital helped breed lasting development; we’ll now consider these types of capital more formally. As we dive into the five types of capital here, and much more deeply in Chapters 3–7, you should keep in mind one central idea: the importance of each type of capital comes as individuals, families, or maybe even communities use it to eliminate poverty in their own lives. Figure 1.1 illustrates this central point; indeed, a book could be written about how the five types of capital work with each other. My interest lies in how they work within individuals.

Before moving on I want to offer a bit more about the choice of the term capital to describe these five elements. I previously portrayed capital as a durable resource that produces wealth; a more technical, yet equally simple, definition says that capital is the “accumulated wealth of an individual, company, or community, used as a fund for carrying on fresh production; wealth in any form used to help in producing more wealth.”²⁰ Money is clearly capital, wealth that when properly invested produces more wealth. Each of the other types of capital similarly self-perpetuates and grows. Taken together, they embody the notion of “wealth in any form” in the definition above.

FIG. 1.1.   The Five Types of Capital. (Source: Created by Nathanael Read.)

Capital, like energy, represents the capacity to do work—energy creates movement in the physical world, capital creates value, utility, or wealth, in the economic one. The analogy proves useful but imperfect because energy gets consumed as it becomes useful work. Capital, on the other hand, energizes useful work but also regenerates itself for use in the future; a more perfect analogy portrays capital as an engine. Capital represents a durable, but not perpetual, asset because even engines wear out over time and need continual maintenance to ensure productivity. Let’s now introduce the five types of capital in more detail.

Institutional capital.   Sociologist Dick Scott of Stanford University defines institutions as “regulative, normative, and cultural-cognitive elements that, together with associated activities and resources, provide stability and meaning to social life.”²¹ Institutions have two major components: tangible regulatory structures, the laws and regulations that become enacted and enforced by organizations, such as the legal and administrative structures that constituted the English Patent system in the eighteenth century, and intangible cognitive/normative structures, the ways people frame the world and how they think about what is right and wrong, appropriate or inappropriate.

Institutions figure prominently in the fight against Big P poverty as that battle takes on the large and fundamental institutions of a country or region. Meta (high-level) institutions—for example, religious systems such as Christianity, Islam, Hinduism, or the dictatorial or democratic political systems we know as states—and their regulatory machinery loom large as they set the context for Big P poverty and often perpetuate it.²² Cognitive/normative institutions influence both Big P and little p poverty because they establish the mental and moral maps that govern individual behaviors.

Institutional capital grounds the other types of capital because institutional strength underpins and facilitates their development. Beliefs about the role of families or community involvement shape the nature and strength of social capital available to individuals; the value people place on schooling and credentials figures prominently in the level of education individuals pursue. Regulatory institutions such as property rights and the courts that enforce them determine what types of physical and organizational capital can form. Chapter 3 considers institutional capital and introduces the metaphor of yarn-dyeing to illustrate its foundational role in eliminating poverty.

Social capital.   Sociologist Alejandro Portes defines social capital as the sum total of resources available to individuals by virtue of the strength of relationships between them and other social units—or to put it briefly, whom an individual has relationships with.²³ Watt met his angel investor John Roebuck through his professional associate and friend Joseph Black. Social capital comes in two forms, strong or weak ties, and plays roles of bonding groups together or bridging different groups and resources.

The family or clan represents the prototypical strong tie relationship. Family life entails sustained, detailed, and deep interactions that transmit worldviews and norms of behavior from one generation to the next. Strong ties are thick, deeply embedded social relations.²⁴ Membership in a clan, tribe, or larger ethnic or geographic group locates and centers an individual’s identity and underpins both attitudes and behaviors. Strong tie relationships bind us to that identity; bonding social capital articulates and reinforces how abstract cognitive and normative institutions play out in the concrete nature of daily life.

Relationships with school, work, or church associates usually exist as weak ties. The emotional bonds may be as strong, but the number, range, and intensity of those interactions are weaker than in strong tie relationships; they constitute the thin, temporary, and limited interactions we have with others. When we access our broader network of associates we often do so to gain access to resources we don’t have; this is the role of bridging capital. Bonding capital typically has intrinsic value in our lives by providing meaning, but bridging capital has instrumental value as it helps us acquire and leverage resources for our gain. Chapter 4 explains that social capital can be a double-edged sword that enhances or hinders the escape from little p poverty.

Human capital.   Economist Gary Becker formalized the concept of human capital in the 1960s as the “imbedding of resources in people.”²⁵ Since Becker’s initial foray into this area, economists think about human capital as primarily knowledge resources embedded in people, whether that knowledge comes from formal education or on-the-job training. Indeed, the two most prevalent measures of human capital are years of schooling and years of work experience. These measures capture the head (knowledge) and hands (skills) aspects of human capital.²⁶

Human capital needs to capture the heart to complete the picture suggested by the head and hands. The heart captures a set of attitudes and the abilities they foster, or the psychic and emotional resources embedded within people that both facilitate their framing of challenges and provide the energy to respond. The attitudinal component of human capital includes things like the willingness of individuals to set goals and the ability to work to reach those goals, especially when they represent a real stretch for the individual.

Perseverance (the ability to keep working to accomplish tasks, even when the task is difficult), hopefulness and optimism, level of fear and anxiety, and a host of other emotions and character traits could be considered important to the heart, in fact too many to create an exhaustive list. You’ll see in Chapter 5 that James Watt had a good head, skilled hands, and a strong heart, and that each played a role in his lifetime of invention.

Organizational capital.   Organizations are, at the very core, vehicles for coordinating human action in order to accomplish things that individuals can’t do alone. Matthew Boulton’s Soho Works pioneered the factory system, a new way of organizing production. Organizational capital can be defined as the different recipes and methods for coordinating activity. Management scholars have considered organizations and their nuances for decades, but few have considered organization itself as a source of capital. That must change for the fight against poverty to move forward.

Two elements play an outsized role in the functioning of organizations: the distribution of ownership and offices. Ownership entails a set of obligations, usually backed up by contract law that defines who owes what to whom and who gets what from whom. It determines that the effort and energy people expend in their work and ownership arrangements play a critical role in determining the effectiveness of collective action. The concept of offices traces back to sociologist Max Weber’s writings on bureaucracy.²⁷ Offices determine what people do in an organization. Decisions about what people do create opportunities for organizations to exploit the gains from the division of labor.

Ownership and offices come in two broad flavors: informal and formal. Organizations with informal offices take as their template the family, clan, or tribe; authority rests on tradition and social or kinship status. Formal organizations, on the other hand, rest on principles or rational choice and law. Explicit roles and job descriptions exist and tasks are parceled out based on expertise and authority from the legal ability of the organization to sanction behaviors. Chapter 6 shows the importance of organizational capital, but also its neglect in many efforts to eliminate poverty.

Physical capital.   Physical capital may be a misnomer for the last type of capital because some of the elements of physical capital aren’t physical (tangible) at all; physical capital can be divided into solid (substantive) and liquid (financial) components. Watt needed, and found, the eighteenth-century version of venture capital to bring his engine to market. He and Boulton also used credit and creative financing to introduce their machines to skeptical customers. Watt’s engine also incorporated the latest technological advances in iron production.

Solid physical capital refers to tangible assets such as buildings, homes, autos, bicycles, or tools and other equipment. Liquid physical capital refers to money—the original subject of this chapter—and things closely related to money, such as insurance policies, investments, and credit. The value of physical capital depends on how well the solid and liquid components fit with the other types of capital. Complementarity with other resources, then, represents a crucial aspect of physical capital, including financial capital. Think of how little your computer matters if you don’t have the right power adapter for the country you’re in! Chapter 7 describes physical capital’s importance as a piece of the puzzle in fighting poverty.

GOING FORWARD

The next chapter argues that if the five types of capital represent the energy people use to escape poverty, then self-reliance acts as a set of gears that focuses and directs that energy in the most productive ways. Part I of the book, Chapters 3–7, will give substance and content to the five types of capital described above. The other three lessons from Watt’s engine—it’s a long haul; working with others; and measuring success—matter because they shape the nature and structure of organized effort to eliminate little p poverty.

Chapter 8 discusses vision, strategy, and leadership as three tools to help manage the long-term nature of development efforts. In Chapter 9, I’ll provide some guidance for selecting partners and creating and managing alliances, joint ventures, or other ways to work with others to implement programs and policies. Chapter 10 takes up measurement issues, both the fundamental need for measurement as well as a critique of some currently popular ways of measuring the success of development efforts.

The fight against poverty, little p or Big P, requires effective organizations and effort, for the war on poverty can only be won by organized militias, not by individual combatants. Part II explains how you can use the five types of capital, as well as lessons about mission, partnerships, and evaluation to mold an organization that becomes an effective weapon in the fight against poverty. My lessons will give you strategic guidance and principles, not tactical instructions or plans to help you succeed in time (today) and over time (many tomorrows). You won’t find the “five steps you need to take today” in these pages. How you implement these principles depends on your particular programs, places you operate, people you serve, and priorities that drive your work. Principles allow you to tailor; plans provide off-the-rack, often ill-fitting advice.

Chapter 11 brings the book to a close, with a twist. The title captures the central premise of the book, that money alone can’t eliminate poverty; it’s not the means to lifting people into prosperity. But is money, or income or wealth, the end of eliminating poverty? What does it mean to prosper? I’ll reach back as far as Aristotle for the answer to that question. For now, though, let’s settle in to eighteenth-century Scotland to learn more about what it means to be self-reliant.