Embrace market mechanisms

When considering social innovation it is natural to think solely in terms of a totally new system, of the way things should be. It's natural to want to start from a white piece of paper and start without any constraints.

Thinking big, and I mean humongous big, is a good thing. Brain-storming without any limits is without a doubt the best way to get the innovation and ideas flowing.

However, it's a mistake to think that you should always think 'out-the-box' or 'blue-sky thinking' or whatever the catch phrase is this week. Constraints are good. All existing systems must be good for the simple reason they are existing! They must meet some sort of need or fulfil some want or they wouldn't be there.

So rather than assuming you should start from scratch, look at what's there then consider why it has stood the test of time. If you have a vision of how things should be, measure it against what is there now. Where are the vision's advantages? Where is the existing systems stronger? How can you reduce those?

Anyone who has taken high school science knows that in experiments there is no such thing as "no result". If nothings happens, that's still telling you something.

If a good cook tries a new recipe and isn't impressed by the results, their first instinct is to try put there finder on what is wrong. Is it the texture? Is there an ingredient missing? Or is there too much of one ingredient? Even if they never try that recipe again, they have learnt something from it.

Zimbabwe had the largest inflation rate in the world. Prices for goods and services (when available) would sometimes double by the hour. Businesses started quoting prices in shoe-boxes. You could fit a certain number of the largest note into a shoe box so rather than counting out hundreds of thousands of notes, you could count out tens of boxes. Did you know that in some countries a billion is 1,000,000,000 (a thousand million) and in others it's 1,000,000,000,000 (a million million). Ever tried to count in 500,000s up to a billion? Sounds easy and it should be, but try it. And yet the entire population adapted. Thousands of people made their livelihood from exchanging foreign currency. A country with an economy in collapse still managed to produce a profitable business for entrepreneurs, and even individuals without much formal training developed the skills to perform huge transactions without any calculators or spreadsheets, network to track the exchange rates, take a commission while keeping enough capital to offset highly difficult market conditions. Yet somehow entrepreneurs thrived. The Southern Times Africa has a story showing that you had people selling vegetables on the street then taking that cash to the stock exchange and buying and selling stocks and shares! Zimbabwe has since effectively adopted the US Dollar now, and most of these entrepreneurs have had to find other work. Many people say even though there is more money in Zimbabwe now, it seems harder to make money.

So was the government wrong to drop the Zimbabwe dollar? No, normal businesses can now operate effectively in Zimbabwe again. But maybe, rather than assuming Zimbabwe needs a new monetary system, perhaps Zimbabwe needs a way to enable those who proved their foreign exchange skills as street vendors to use those skills a a formal sector?