Clearly, if present trends continue, it will be some time before the trickle down theorized by economists reaches the poor. A length of time that neither our polities nor our ecologies — let alone our moral conscience as a nation — can hope to survive.

The eradication of poverty needs different approaches. First, of course, it needs some deep structural changes in society: grassroots democracy, land reform, access to livelihood resources and fulfillment of everyone’s right to reasonable education and health care. Such change is worth the strongest struggle on the part of every citizen, but the opposition to it from the rich and powerful means that it will be gained only over the long haul. In the meantime, it is also worth mounting an attack on poverty within the existing systems, highly resistant to change though they may be, to remove at least the most extreme forms of inequity.

To do this, technology and the marketplace must be subverted to the cause of what Mahatma Gandhi called antydaya – "putting the last first" – mainly by creating the conditions which generate jobs and livelihoods that will enable the mass of people to position themselves in society to start asserting their rights and getting them. The instruments needed to achieve this are far more sophisticated and complex than any available today. And, that means we need the highest levels of innovation and implementation– which in turn requires the very best in creativity and management expertise.

But, herein lies a fundamental contradiction.

After all, the very best in creativity and management expertise comes at a price – a price today determined by the interplay of economic forces in the so called global economy. Mechanical engineers, software designers and MBAs are, nowadays, commonly starting their careers with salaries approaching 30,000 US Dollars a year, even in an economy like India’s; and double that for overseas assignments. The cost of the office space, computers, equipment, air conditioners, cars, travel and other operational expenses they need is comparable to and sometimes higher than in the industrialized countries. And these are the kinds of costs faced by any meaningful initiative to create sustainable livelihoods.

In the industrialized economy, the prices commanded by the outputs of activities based on such costs can easily be paid by the customer, who also earns comparable incomes – that after all, is the basis of the closed loop of household incomes and corporate expenditures that is explained in Chapter One of every economics textbook.

But in a rural economy like that of India, the customer earns less than two dollars a day.

Clearly, there exists a massive disjoint between the cost of the goods and services needed by the poor and the prices they can pay for them. One solution lies in creating standardized products and high volume sales – a state that takes time to build up to. The second solution lies in subsidizing the one time cost of research, startup and operationalizing a business so that the customer faces only the downstream recurring costs of production and distribution – probably the only type of subsidy that can be justified on any ground.

Both solutions need public resources for the capital investments so that the incremental costs of each unit of product or service can be brought down to a level that is affordable to the buying public. And they need private sector inputs, too: operational financing, efficiency and the ability to deliver results.

This is why Development Alternatives and its affiliates such as TARA and TARAhaat have found it necessary to mix the public and the private, a pure anathema in conventional institutional design. The breakthrough lies in clearly separating the objectives, which are social, environmental and developmental, from the strategies and methods used to achieve them, which are purely business. And that means we need sources of capital that can accept longer time horizons for achieving profitability and possibly lower profits than are usually available in the market. Clearly, in the early stages of such development ventures, financing of this type is more likely to come from public agencies and development banks than it is from venture capitalists – unless they are unusually visionary and can see the value of the social benefits now and the larger returns to come later. q