Producing programs on the ethics of foreign aid and international development can be challenging and fortifying, particularly our shows on the subject — or my interview with Patrick Bellegarde-Smith about the state of Haiti. Not everything a guest says will ring true to the listener’s ear. It’s in the very nature of individuals like Jacqueline Novogratz and Binyavanga Wainaina to penetrate the bubble of our own preconceived notions, or at least play on that elasticity.

But that doesn’t mean we shouldn’t clarify and ask follow-up questions that might round out, or downright challenge, these ideas. It’s good to listen but also to have a good healthy dose of skepticism and the willingness to check it out.

While producing this week’s program, we did just that. I asked Krista if she would sit down again with Chris Farrell, our chief economics correspondent, whom you probably hear most often on Marketplace and Marketplace Money.

Personally, I wanted to better understand some of the terms that Jacqueline Novogratz was using — sometimes as points of differentiation and, at other times, interchangeably. Terms like “donor” and “investor” or even ideas like “venture capital” and “return on investment.” I also wanted to get a lay of the land, a broader view about what “patient capital” (which, Chris says, applied to dot-com startups like Google at one time) means to the larger financial and investment sectors.

Chris gives a helpful history of the origins of social investing, addresses some of this prevailing skepticism, and tells us that he thinks of markets as “chat rooms” as much as “listening devices.” This interview is well worth your while if you want to better understand social entrepreneurship and how we might help others in need.

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Thanks for this interview with Chris. I find Krista's hesitation about markets very justified, although I think small entrepreneurs in South world countries do quickly move into market niches. I studied the expansion of the internal market in Bolivia decades after the revolution which drove out the patrones. The hacienda system had skimmed off all surplus production from the campesinos. Slowly small markets were set up high in mountain communities. I once had a market lady- barely literate - give me one of the best descriptions of market capitalism I've ever heard. In high poverty areas the smallest niche is quickly filled. Lack of capital is a huge hurdle, which is why programs like Kiva and microlending are so great.
But as soon as someone discovers a profitable niche, not only do other entrepreneurs flock as they are able, but so do the fraudsters. Suppose, in the water sales example, someone drains a sacred spring, or steals water from less powerful farmers, or uses bureaucratic corruption to take public water meant for a slum. And then there's the very effective tax system used in much of Spanish America, where the tax collector's salary comes out of what he collects. Easy to destroy small beginnings. I think this should be paired with an example I saw on, where an Indian entrepreneur is setting up a legal aid style business, providing low cost attorneys to fight corruption in the bureaucracy.