Yunus youtube library
; new "public affairs" book
; citizen corresponendents
Here are some draft one-page debating scripts from the new Yunus book subtitle : social business - future of capitalism
1 What is Good (win-win-win) Global?
In a world where the ideology of free enterprise has no real challenger, why have free markets failed so many people? As some nations march towards ever greater prosperity, why has so much of the world been left behind? The reason is simple. Unfettered markets in their current form are not meant to solve social problems, and instead may actually exacerbate poverty, disease, corruption, crime and inequality
I support the idea of globalization –that free markets should expand beyond national borders, allowing trade among nations and a continuing flow of capital, and with governments wooing international companies by offering them business facilities, operating conveniences and tax and regulatory advantages. Globalization, as a general business principle, can bring more benefits to the poor than any other alternative. But without proper oversight and guidelines, globalization has the potential to be highly destructive. Global trade is like a hundred-lane highway criss-crossing the world. If it is a free-for-all high way, with no stoplights, speed limits, size restrictions or even lane-markers its surface will be taken over by the giant trucks from the world’s most powerful economies. Small vehicles will be forced off the highway. In order to have win-win globalization, we must have fair traffic laws, traffic signals and traffic police . The rule of the “strongest takes all” must be replaced by rules that ensure the poorest have a place on the highway. Otherwise the global market falls under the control of financial imperialism
Are any of these answers to the above problem?
?Government? page 6
?Non-Profit Organisations? Page 9
?Multilateral Development Institutions – eg world bank, international finance corporation, 3 regional development banks of Africa, Asia, Caribbean page 11
?Corporate Social Responsibility? Page 12
2 Capitalism has become a half-developed structure –p14
Capitalism takes a narrow view of human nature, assuming that people are one-dimensional beings concerned only with the pursuit of maximum profit. Today’s concept of the free market is based on one-dimensional human being. It postulates that you are contributing to the society and the world in the best possible manner if you just concentrate on getting te most for yourself. When believers in this theory see gloomy news on television, they should begin to wonder whether pursuit of profit is a cure-all but they usually dismiss their doubts, blaming all the bad things in the world on “market failures”. They have trained their minds to believe that well-functioning markets simply cannot produce unpleasant results.
I believe there is a much deeper problem. Today’s free-market theory suffers from a “conceptualisation failure”, a failure to capture the essence of what it is to be human. Conventional business theory has created a one-dimensional human being to play the role of business leader. We’ve insulated him from the rest of life: the religious, emotional, political and social. He is dedicated to one mission only – maximise profit. He is supported by other one-dimensional human beings who give him their money to achieve that mission. To quotte Oscar Wilde, they know the price of everything and the value of nothing.
Our economic theory has created a one-dimensional world peopled by those who devote themselves to the game whose victory is measured only by profit. And since we are persuaded by the theory that pursuit of profit is best way to bring happiness to humankind, we imitate the theory striving to transform ourselves into one-dimensional human beings. Today’s world is so mesmerised by the success of capitalism that it does not dare doubt the system’s underlying theory.
Yet the reality is very different from the theory. People are not one dimensional entities: they are excitingly multidimensional. Their emotions, beliefs, priorities and behaviour patterns can best be compared with the millions of shades we can produce from the three primary colours. Even the most famous capitalists have a wide range of interests and drives which is why tycoons like Carnegie or Bill Gates ultimately turn away from the game of profit to focus on higher objectives.
The presence of our multi-dimensional personalities means that not every business should be bound to serve the single objective of profit maximisation. This is where the new concept of social business comes in.
Exercise: How would you map organisational system of a social business
3 Seeing what a social business is and is not –page 17
To make today’s half-developed structure of capitalism complete we need to introduce another kind of business –one that recognises the multi-dimensional nature of human beings. Entrepreneurs of social businesses design organisational systems not for limited personal gain but to pursue broad social goals
How can the products or services sold by a social business provide a social benefit. There are countless ways. For a few examples, imagine:
A social business that manufactures and sells high-quality nutritious food products at very low prices to a targeted market of poor and underfed children
A social business that designs and markets health insurance policies that provide affordable medical care to the poor
A social business that develops renewable-energy systems and sells them at reasonable prices to rural communities that otherwise can’t afford access to energy
A social business that recycles garbage, sewage, and other waste products that would otherwise generate pollution in poor or politically powerless neighbourhoods
In its organisational structure, the social business is basically the same as a for-profit business. But it differs in objectives. Like other businesses it employs workers, creates goods or services, and provides thee to customers for a fair price. But its underlying criterion by which it should be evaluated- is to create social benefits for those whose lives it touches. The company itself may earn a profit, but investors who support it do not take any profits out of the company. A social business is a company that is cause-driven rather than profit-driven, with the potential to act as a change agent for the world.
A social business is very different from a charity. It is a business in every sense. When you are running a business you think differently and work differently than when you are running a charity. There are many organisations in the world today that concentrate on creating a social benefit. Most do not recover their operating costs. Nonprofit organisations and NGOs rely on charitable donations, foundation grants, or government support. Their leaders are forced to devote a lot of their time and energy to asking for money, a form of fund raising that focuses on institutional survival rather than expanding the benefits they can offer to those in need.
A social business is different. Operated in accordance with sound business principles, it aims for full cost recovery or even more as it concentrates on creating products and services that provide a social benefit. It pursues this goal by charging a price or fee for the products or services it creates.
A social-objective-driven product that charges a price or fee for its product but cannot cover its costs fully does not qualify as a social business. As long as it has to rely on subsidies and donations to cover its losses, it remains in the category of a charity. But once such a project achieves full cost recovery on a sustainable basis it graduates into another world – the world of business. Only then can it be called a social business. The achievement of full-cost recovery is a moment worth celebrating.
A social business differs from a charity in another important way. It has owners. A social business doesn’t pay profits to investors but it does pay back to investors all of the money they invested. How long would that take. That is up to the management and investors. Also once the investors are repaid, they remain part owners of the social business with a say in its future. Businesspeople find this an exciting opportunity not only to bring money to a social business but to leverage their own business skill and creativity to solve social problems. That’s a very exciting prospect.
Exercise: if you know of cases of social businesses, we’d love to hear of them at email@example.com with a view to sharing among fellow users of these scripts
4 Mistakes made by Development Program Economics –p52
1 Programs addressed to children should not be looked upon as “humanitarian” or “charitable”. If poverty is to be reduced or eliminated, the next generation must be our focus. We must prepare them to peel off the signs and stigmas of poverty, and instill in them a sense of human dignity and hope for the future. Thus children focused programs are prime development ones – no less so than building an airport, factory or highway.
2 Development strategies focus too much on material accumulation and achievement. Instead the focus needs to be shifted to human beings, their initiative and enterprise. The first and foremost task of development is to turn on the engine of creativity inside each person. Any program that merely meets the physical needs of a poor person or even provides a job is not a true development program unless it leads to the unfolding of his or her creative energy.
3 Standard definition of economic development misses out on true contextual sustainability. Economic development should not be measured solely by income per capita, consumption per capita or anything per capita. The essence of development is changing the quality of life for the bottom half of the population. And that quality is not to be defined just by the size of the consumption basket or the range of choices offered to a person alone. It must also include the enabling environment that lets individuals explore their own creative potential. This is more important than any mere measure of income or consumption. (So it is that microcredit turns on the economic engines among the rejected population of society. Once a large number of these engines start working, the stage is set for big things.)
Exercise: Can you think of other blindspots of classical development economics?
5 Visioning a bank for the poor is not just about financial services- it must set a strong social agenda... This is how and why Grameen Bank is: page 54
No one who borrows from Grameen Bank stands alone. Each belongs to a self-made group of five friends, no two of whom may be related. When one of the five friends want to take out a loan, she needs approval from the remaining four. Although each borrower is responsible for her own loan, the group functions as a small social network that provides encouragement, psychological support, and at times practical assistance in bearing the unfamiliar burden of debt and steering the individual member through the unfamiliar world of “business”.
Neither does each group of five stand alone. Ten to twelve groups come together in a weekly meeting in a centre, which is a simple hut like structure. There are 130,000 centres around the country serving Grameen members. At the weekly meeting, loan repayments are collected by the local branch officer, applications for new loans are submitted, and various inspirational, instructional and practical activities are undertaken from discussions about new business ideas to presentations about health or financial topics. The centre leadership is elected democratically. The community oriented dynamic of Grameen bank is an important reason for the success of our system.
Our social agenda is supported through the 16 Decisions. This is a set of social and personal commitments that evolved during our first decade. By 1984, they had become an integral part of the Grameen program. Every new member of the bank is expected to learn the 16 decisions and to pledge to follow them.
1 Grameen’s 4 principles – discipline, unity, courage and hard work – we shall follow and advance in all walks of our lives
2 We shall bring prosperity to our families
3 We shall not live in dilapidated houses.
4 We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus.
5 During the plantation season, we will plant as many seedlings as possible.
6 We shall plan to keep our families small. We shall minimise our expenditures. We shall look after our health.
7 We shall educate our children and ensure that they can earn to pay for their education
8 We shall always keep our children and the environment clean
9 We shall build and use pit latrines
10 We shall boil water before using or use alum to purify it. We shall use pitcher filters to remove arsenic.
11 We shall not take any dowry at our sons’ weddings or give any dowry in our daughters’ weddings. We shall not practice child marriage
12 We shall not inflict injustice or anyone; neither shall we allow anyone to do so.
13 For higher income we shall collectively undertake bigger investments.
14 We shall always be ready to help each other. If anyone is in difficulty, we shall all help
15 If we come to know of any breach of discipline in any centre, we shall all go there and help restore discipline
16 We shall take part in all social activities collectively.
Because of the 16 decisions, Grameen borrowers have taken great care to send their children to school. Virtually every Grameen family has all of its school age children attending school regularly – quite an achievement for borrowers who were mostly illiterate. The spread of education to an entire generation of rural Bangladeshi has been a dramatic historical breakthrough.
The success of Grameen bank has grown from our willingness to recognise and honor human motivations and incentives that transcend the purely economic. Human beings are not just workers, consumers or even entrepreneurs. They are also parents, children, friends neighbours and citizens. They worry about their families, care about the communities where they live, and think a lot about their reputations and relationships with others. For traditional bankers, these human concerns don’t exist. But they are at the heart of what makes Grameen Bank successful. The credit we offer is a tool for reshaping lives, and neither we bankers nor our borrowers ever lose sight of that reality.