I have to agree with Tom Friedman, author of “The World is Flat” that Endeavor’s model is “the best anti-poverty program of all”.

Endeavor’s goal in a nut shell is: to create as many good jobs in emerging markets as they possibly can. The model is simple: provide high-potential entrepreneurs in emerging countries with everything that Venture Capitalists provide the most innovative entrepreneurs in America - minus the capital.

Endeavor’s “mentor capitalist” model breaks down economic and cultural barriers through rigorous screening and strategic advising from a network of world-class business leaders. With their guidance, 266 Endeavor Entrepreneurs have created 79,000 jobs and generated $1.9 billion in revenues.

It’s ingenious and hands down the best bottom-up strategy that a non-profit can use to leverage free-market capitalism in emerging and developing countries. Endeavor’s model fully embraces the truth that the wealth of nations resides in our minds. The explosion in the world’s wealth is simply a product of man’s innovations - a product of his mind. With that said, capital is of course absolutely essential to scale a company quickly, but to think capital first is not the right paradigm. Capital will follow work ethic and innovative excellence.

As a side note Goldman Sachs just released a white paper on July 7, 2008 - “The Expanding Middle:
The Exploding World Middle Class and Falling Global Inequality” (FT commentary).

I’ll admit that making projections 22 to 42 years out is a little ridiculous, BUT if trends toward innovation and free-market capitalism in nations across the world continue and we do experience the same relative world peace we have experienced the last 50 years over the next 50 years, it is obvious that this white paper’s conclusions will be realized. Here they are:

• We are in the middle of an unprecedented explosion in the ‘world middle class’, but the pace will pick up significantly further.
• And global income distribution is getting narrower, not wider. So while there is a lot of focus on widening inequality and the embattled middle class in developed countries, globally the opposite is true.
• This story of what we call the ‘Expanding Middle’ – a shift in income towards middle-income countries and people – should accelerate.
• By 2030, two billion new people may join the world middle class.
• These shifts could be a significant influence on spending patterns, resource use, and environmental and political pressures.

Trust me, I’ll be the first to admit that capitalism can fail, just like every form for governing any kind of behavior. But all things equal, every other known system will fail, including democracy, before capitalism. Why won’t people recognize this simple fact? Why are certain people intent on fighting against our very best known solution for fighting poverty? I realize it isn’t the most positive thing to say the following truth, but I don’t say it to be offensive but to simply state a reality - All critics of capitalism in America are hypocrites. This is an easy claim to make considering they consume and benefit and enjoy the higher quality of life that capitalism offers them every single day. To avoid hypocrisy they would have to move to Cuba, North Korea or the Mideast. Although it wouldn’t be a surprise if critics had a victimized response for their hypocrisy. I’m sure they have lots of excuses.

I’ll admit, I get bugged when there are thousands of good causes to fight for and thousands of bad causes to fight against, and somebody chooses to fight against one of the very best good causes on the planet. What a waste of life! It holds the same nobility as the efforts of those fighting to get the “F word” approved for prime time T.V. Now there is a cause worth fighting for, one that your children and grand children can be proud of.

I have to continue my rant and post an e-mail I sent a fellow employee who had questions about how to deal with a microfinance institution in Mexico - Compartamos - that went public and is now making money hand over fist. I feel like I did an o.k. job of putting capitalism in the proper perspective in this e-mail. For what it’s worth, here it is:

We had a donor at our Santa Fe conference who bemoaned the idea of MFIs going from non-profit to for-profit, and the idea of MFIs being so growth focused, etc. It was really interesting hearing an individual who had made his millions in oil have this point of view, and there are other people who have used free markets to make their fortunes who feel the same way. There will be different reasons why they feel how they do, but for the most part the wealthy have developed a financial cushion which makes it easier to focus on “what’s most important” in life.

We all know there is a better way than capitalism – the central question is: “Is it possible to use laws and policies to coerce people into that “better way”, or do people have to choose that “better way” of their own free will and choice?” This central question has been posed a million different ways (literally), perhaps one of the other 999,999 ways the question has been stated makes more sense.

There has been a lot of experimentation to try and find a better way than capitalism for creating a change in the quality of life for hundreds of millions of people day in and day out, and nothing has even come close. Why? Because self-interest, which isn’t the highest motive, seems to be the most prevalent motive. The beauty of capitalism is that it has taken self-interest and made it largely work for the common good.

In fact capitalism has been so successful that I believe even the harshest critics are forced to say “capitalism doesn’t work that great, but it is the best we got. They could say the same for democracy as well: “democracy doesn’t work that good, but it’s the best we got”.

Read some of Muhammad Yunus’ rhetoric and I think he really believes that Microfinance represents “a better way”.

If Compartamos looks, acts, and smells like any other mainstream bank (I don’t know if they do) I vote Compartamos and any other pure bank giving tiny loans be peer pressured (no extortion) into eliminating the use of the term “micro” in any of their messaging – and that this be done with the understanding that in the end they may not give into the pressure. But that’s just me.