A Critique of the Neoliberal Model for Humanitarian Engineering Courses

The four-day conference on Humanitarian Engineering, Entrepreneurship, and Design (HEED) was the first of its kind on campus, gathering students, professors, and non-academic professionals from different fields. Professor Khanjan Mehta of Lehigh University shared his experiences working on projects in developing countries with his former students at Penn State. He was the founder of Penn State’s humanitarian engineering program where they developed solutions to many problems in agriculture, energy, water, and health. Organizers are hoping to replicate this model and offer HEED as an elective course in UP Diliman.

Understandably, many of those in the humanitarian engineering sector would see this as a positive development, especially with the increased participation of the youth. But to me, Mr. Mehta’s model is not a solution to poverty. It does not address the root cause of poverty nor does it ensure a strong social safety net. Rather it subjects poor communities to the brutal forces of the free market, putting them at an even greater financial risk. It is a clever rebranding of the failed neoliberal project; a ridiculous attempt by the prophets of globalization to humanize an economic system that has brought generations of suffering for many in the Global South.

Mr. Mehta’s approach sounds reasonable on the surface. People need money and for them to have money, they must have jobs. Jobs–either in the form of owning a small-scale business or working for one. He treats poor communities not as beneficiaries of charity, but as potential market actors–buyers and sellers of products who constantly seek to accumulate more capital. Poverty, to him is not as complex as many academics like to think. It is simply about not having money.

But this concept of poverty is far removed from the realities on the ground, for it confuses the symptoms of poverty with its cause. It is not simply an issue of not having cash. This problem is complex and institutional. It perpetuates itself within a system built on decades of flawed government policy and colonial rule. It thrives in an environment where those who have the most power have far more privileges–social and economic. Until there is an active effort to dismantle this system, no amount of cash infusion can lift people out of poverty.

It is foolish, then, to adopt a model of humanitarian engineering based on the principles of the free market enterprise and expect positive social outcomes, for isn’t this the same system that has allowed the top 1% to own half of the world’s total wealth? Is this not the same system that denies people hospital admissions because they do not have enough money to pay? And isn’t this the same system that has destroyed rivers, oceans, mountains, and forests in the name of “progress?”

Mr. Mehta hopes to adopt a small-scale and more humane version of free market capitalism. The social entrepreneur, in this context, provides solutions to many social problems while simultaneously making profits from her enterprise. Not only does she sell a product, she also designs a business ecosystem where everybody profits. She’s optimistic that with enough profits, there will be more local entrepreneurs coming up with their own businesses. It’s a “win-win” solution–that is if you’re trying to throw more people into the poverty cliff.

It’s basic math, really. Why would a small-scale business thrive in a community where people have no money? And how would the social entrepreneur determine the price of her products? “Do not assume that there is a certain profit margin that you have to follow. Sell your products at the price that customers are willing to pay for,” Mr. Mehta argues. Thus, if the social entrepreneur made a product for Php 50 and she wanted to sell it at Php 70, but the locals could only afford Php 52, she would have no other choice but to yield. In this business model, instead of profits driving innovation, it is the satisfaction brought by the idea that one has solved a community problem.

The converse is much more striking and it exposes the contradictions of the neoliberal model and why it can’t be made humane. If the social entrepreneur made a product for Php 50 and she wanted to sell it at Php 70, but the locals could only afford Php 40, would she sell it at a much lower price? Profit lies at the heart of any business, no matter how hard people try to deodorize it, and one can never run an unprofitable business without running out of money. The social entrepreneur will be faced with two options–to abandon the community and look for communities that can afford her product or innovate and spend more money creating a cheaper product.

Here lies the problem. Why would a social entrepreneur spend more money creating a product that can give her less profits instead of just selling it to another community that can afford it when she could solve the same problem either way?

To solve the problem of limited aggregate capital, the only option would be to open the community to external investments so more money circulates within a community. But why would any investor want to spend her money on a community that cannot guarantee immediate returns to her shareholders? What would she gain from a community that lacks education and natural resources? To keep attracting more capital, communities would have to commodify every single basic necessity–food, water, energy, etc, to attract more social entrepreneurs. This essentially relieves the government of its mandate and privatizes social services in poor communities. In other words, poor people will have to pay for things that are already beyond their reach.

Social entrepreneurs give the government more reason to cut spending on public services. They are agents of neoliberalism masked as stewards of positive change. Why would the government choose to spend, when there’s already a private enterprise operating at a low cost? Poor people are thus faced with more uncertainty, as their future becomes subject to the whims of social entrepreneurs. Whether they can buy food for the next week depends if the social entrepreneur is still making profits.

Students taking HEED are also at risk of becoming manipulated by many unethical corporations. In a course that requires students to think and execute projects, you need seed funding, and that can either come from the government or from private entities. As the College of Engineering is no stranger to schmoozing with the most unethical companies just to get money, I strongly suspect that this will be the direction of HEED. And if you, the student, received large sums of money from company X, wouldn’t you feel beholden to them?

Corporate money doesn’t come without any strings attached. You’d have to advertise for them and pretend that what they’re doing with the environment and with their own labor force doesn’t matter. Take the case of mining engineering students who have no problem taking money from mining companies who are responsible for the murder of environmentalists, tribal leaders, and anti-mining activists. There was so much passion when Gina Lopez threatened the profits of their corporate masters. “Gina Lopez is not qualified to be DENR Secretary because she has no science-related degree.” Strangely there was no such outrage when a graduate of the military replaced her. “We’re also environmentalists,” they said. “We’re not trained to destroy the environment.” Such twisted and corrupt views are expected from trained dogs blinded by money. And this is what I fear will happen to HEED students who rely on corporate funding to complete this course.

Mr. Mehta tries to blur the line between sustainability and profiteering, arguing that there can never be a solution to a social problem unless it is profitable. His model is not based on compassion, but on greed. And greed is what fuels the neoliberal engine. So long as this engine runs, social entrepreneurs cannot pretend that what they are doing is ethical. On the contrary, profiteering is never sustainable. It relies on the expansionary logic of capitalism, the constant search for new markets, and the relentless pursuit of growth.

Humanitarian engineering was made not to profit off the suffering of the impoverished. It is meant to empower them, to make use of the resources around them using the skills we teach. We can never create jobs by using the same system that took away their jobs nor can we solve social problems by relying on the same system that created those same problems. Instead of teaching them greed, we must teach them common ownership and profit-sharing. This model has been successful in many parts of the world.

As neoliberalism becomes more unpopular in the West, it will constantly try to rebrand itself to deceive more countries in the developing world. Sometimes it’s called austerity and many times it’s called structural adjustment programmes. Worse, in the past and even today, it is called “freedom.” Yes, the economic system that favors the wealthy and robs from the poor calls itself freedom. I do not know how it would call itself in the future. Depends on the place, I guess. Who knows, in UP Diliman it may soon be called Humanitarian Engineering, Entrepreneurship, and Design.

Credits to marketoonist.com for the cartoon.