The past century has exhibited a dramatic shift in the political and economic ideologies which predominate the global marketplace. World War I and the years following exhibited a very statist approach to management of the marketplace and world economies. It was believed that governments could more effectively manage markets than those in the marketplace. Although socialism is the extreme of this view, most countries around the world did employ statist approaches at some point. The most common manifestation of this approach is in tarrifs, import taxes, quotas, and currency devaluation. These all fall under the approach known as Import Substitution, an approach designed to reduce the spending of the government and in turn, the debt.
With the failure of most statist regimes, a new approach has burgeoned. This new ideology is often referred to as neoclassicalism. It seeks to remove the government from everything but what is necessary to ensure the liberty and property rights of citizens. Of course, within this philosophy is a wide spectrum of beliefs and varying degrees of adherence. Liberal neoclassicists want to eradicate all of government, while some are more conservative.
Kiva is unique. It is riding the wave of globalization, and also of neoclassicalism. By providing the opportunity for private investors to lend money to others in third world countries, the need for government intervention via subsidies, loans, etc. is reduced. Kiva is promoting a form of globalization focused on the individual, from individuals, for individuals.Read More