What is Economic Self-Reliance?

Editor's Note: This issue begins our third year under the banner ESR Review. ESR stands for economic self-reliance, and we have published a number of themed issues addressing particular issues of development and self-reliance. When I first became involved in this project, my task was to define what we mean by economic self-reliance and to create a theory-based model of how individuals and families can become more self-reliant. The next four issues will center on the different elements of the model. This issue focuses on the role of human capital in economic development and self-reliance.

Current thinking about economic development has not bettered global livelihoods. Speaking at the 2007 annual meeting of the American Economics Association, Professor Simon Johnson of MIT invoked a powerful metaphor to highlight the failure of existing models; he noted that sustained progress in health and sanitation came only after "public health had the germ theory of disease. Economics has made great progress, but it's still waiting for its 'germ theory of disease.'" 1 Without a solid model, economic development models produce hit-and-miss successes.

Creating economic development represents more than the mere academically elegant exercise of theory building. Pragmatically, ineffective development models mean that real money is being granted, loaned, or invested without any real, sustainable return. Economically, the lives of billions are lived out in misery and despair while many tools of better living are readily available. At a very basic level all of us suffer because social justice is not being achieved and the spiritual talents and gifts of far too many lie fallow and undeveloped.

WHAT IS ECONOMIC SELF-RELIANCE?

Economic self-reliance (ESR) represents a different way of thinking about the processes and outcomes of economic development. ESR is an individual's ability to garner and hold economic resources in excess of their basic needs.

The concept of ESR recognizes that there are individuals who are unable (due to physical or mental disability) to garner any surplus resources, individuals with surpluses large and secure enough to meet any conceivable need, and individuals at every point in between. ESR affects the entire spectrum.

ESR is also context specific; what constitutes "basic needs" for someone in a developed country will differ drastically from someone in a developing country. But the core...