When 'Ifs' Turn to 'Buts'...The Complicated Moral Question of Microfinance

Back in July I had a bit of a moral exercise with myself, wondering whether profiting from the poor was immoral and/or if it even mattered. Of course the answer to the latter was and remains yes. On the former, perhaps even asking the question itself showed the chinks in the moral armor I ultimately clothed such practices as microfinance in, however I was driven to conclude that profiting from the poor could indeed be moral if a good result were obtained...a sort of beneficent reverse Machiavellianism of societally positive ends justifying what some might see as morally questionable means. Quoting myself:

Answers, as with many such questions, are difficult to come by. That is the nature of a question that can only be answered by using not just logic, but gut feelings shaped by environment, years and generations of experiences, religion, upbringing...the list could easily go on almost indefinitely. However, one answer, and one that is undoubtedly shaped by my own life in a mostly free-market country under representative government is that it is moral to profit from the poor if you are able to help more of them by doing so and are doing so in a way that provides them with opportunities they would not otherwise have had.


Broken down, that can simply be taken to mean that it is moral to profit from the poor if it provides them with a better life. This is underpinned by the notion, not stated here but otherwise in the post, that they might not be receiving help anyway, so if allowing the profit motive to create supply to a demanding market were a necessary evil, or at the least somewhat morally questionable (in the eyes of some) than so be it. There happen to be a lot of 'ifs' in this reasoning, however, indicating a certain degree of liberty taken with assumptions. Maybe it is instead time to explore some 'buts' as in, 'but if the poor are not benefitting, indeed if they are suffering more greatly, is it still moral to profit from them?' To this the answer must be no.
Of course none of this is to suggest that profits are in any way objectionable or evil, least not in the mind of the author of a blog which often writes of the benefits of globalization, free markets and low levels of regulation for banks (a view that is admittedly becoming both itself morally declasse and increasingly difficult to justify).

That said, the search for profits should not create unsustainable debt spirals and cost people their lives, particularly those who are least able to seek guidance or obtain any other help, such as the global poor. This becomes even more apparent when lending practices are rife with corruption, do not include even the most fundamental of credit checks and overall resemble more the business models of loan sharks than community development banks. Unfortunately in the case of for-profit microfinance, it seems that any justification for seeking profits has been thrown aside as such practices have been leading to some terrible results. Continuing in our reverse-Machiavellian vein, when there are no positive ends, it must be said that the means become utterly unjustifiable.