“Creating a World Without Poverty: Social Business and the Future of Capitalism”, by Muhammad Yunus


(Zahid Torres-Rahman) #1


Muhammad Yunus is a man with a mission: consigning world poverty to history. In his book, Creating a World Without Poverty, Yunus sets out his strategy for making his ambitious dream a reality. As the founder of the Grameen Bank, Yunus has been a pioneer in thinking about how to harness business thinking to fight poverty.

"It will require all our creativity and imagination to come up with excellent business ideas that effectively address critical social objectives".

His newest book is characteristically bold: for Yunus, businesses, non-government organisations, governments and donors have all fallen short of their potential contribution to ending poverty. And what’s more, they always will: the potential power of the free market to tackle global poverty remains constrained by the focus on maximising profits and meeting the financial goals of the richest shareholders; governments' effectiveness is often undone by inefficiency and corruption; non-government organisations are exposed to the fickleness of charitable giving when times get tough; international donors like the World Bank are bureaucratic, underfunded, blinded by an exclusive focus on economic growth and, along with other donors, are hung up on working only through governments.

Enter “social businesses” – a “completely new way to use the creative vibrancy of business to tackle social problems”. Operated as business enterprises, these replace the profit-maximising focus with a specific social goal, such as fighting poverty. Importantly, social businesses are distinct from non-government organisations in that they are financially self-sustaining, earning at least enough to cover costs and perhaps more; and distinct from traditional businesses in that they reinvest any profit into their social mission, rather than disbursing it as interest payments to investors. Social businesses also stand out from the crowd of what has come to be known as “social entrepreneurship”, a vague label that has unhelpfully broadened to capture any form of innovation in tacking a social issue, whether employing a business-focused approach or not.

"A social business is not a charity…The social business dollar is much more powerful than the charity dollar. Whereas the charity dollar can be used only once, the social-business dollar recycles itself again and again, ad infinitum, to deliver benefits to more and more people"

For Yunus, social businesses are not a pipe-dream: Grameen Bank and Grameen Danone are two living successful examples. He envisions such models as coexisting and competing with traditional profit-maximising businesses, but ultimately driving a “new, more humane form of capitalism”.

The current global financial crises has given immediate relevance to Yunus’ ideas. Some are beginning to question whether the problems on Wall Street are symptomatic of a deeper malaise in our model of capitalism. Setting aside that heated faction of individuals that has always been anti-capitalist, there remain important questions and insights from Yunus’ model for those of us left who continue to believe in the essence of capitalism as a force for good.

The Achilles heal in Yunus’ book lies in his is relatively casual dismissal of the power of for-profit businesses to fight poverty: through their core business of generating growth and economic value, goods and services, jobs and opportunities, and tax revenues that fund state spending on social programmes. This flies in the face of the fact that it is for-profit businesses – large, and especially small – that have lifted millions of people out of poverty around the world. True business models – that are profitable and responsible – offer the best hope of achieving the scale needed to end poverty. Social businesses add a valuable dimension to the existing diverse tapestry of private sector activity, and the concept holds useful lessons for others – whether they are businesses, governments, donors or non-government organisations. But alone, social businesses are unlikely to transform Yunus’ bold vision for a better world into a reality.


(chris macrae) #2

For transparency I must declare a bias. A year ago, I ordered 1000 copies of this book to form a network around it. I did so for 2 main reasons:
  1. Social business entrepreneur models that Yunus and Bangladesh (including 100000 grassroots networkers of microcredit and other community rising models of health, education, clean water food energy) have tested for 30 years offer a gravitational core to innovation and practicing end of poverty -IF you accept the idea that bottom billion poverty is compounded onto communities by a failed system

  2. My father whose career at The Economist spanned 4 decades forecast back in 1984 that globalisation could only spin one of 2 opposite ways - big brother collapses, or humanity’s most empowering century in which everyone had great jobs matching our flows to make a difference. Ultimately these opposite spins would depend on choice of believing macroeconomics or microeconomics. Dr Yunus is the only practical book I have seen with governance maths and maps that are correct (exponentially compounds deep contextual truths) for human sustainability if you side with microeconomists.

To make the case for social business memorable, Dr Yunus suggests that the most purposeful organizations in the world adopt exactly the opposite primary metric of : how much did we take from the world each quarter? However, unlike social entrepreneurs as a mass movement, Yunus also insists that a positive cashflow model is essential to healthy organisation, but the unique quality goal of social business is the cashflow surplus is always reinvested wholly in the truth of Unique Organising Purpose . Big hairy audacious goal (BHAG) mapped back critical metrics if you use Jim Collins system speak. Dr Yunus’ BHAGs with millenium goals are as inspirimng as entrepreneurship has ever realised in its 210 year life. Outside of Bangladesh , Paris has become the number 1 partnership city in multinational social businesses which is fitting at this stage of the evolution of sustainability investment, and HEC business school starts the SMBA to unlearn MBA next year.

Complexity theory can be transformed back to simplicity by taking the source of greatest conflict out of a system and getting all other sides to confirm a model in which they have no conflicts. Essentially in social business modeling: win-win-win interests between all sides of productivity and demand are transparently modeled by taking out of the picture the most short-term speculative of owners. If a system model cannot show how its purposes win-win-wins for every local society as well as global owners, customers as well as employees, sustaining the environment of nature as well as what man spreadsheets as numerical success - then over time it will compound conflicts and collapse. Unfortunately as globalsiation makes us more connected than separated, those collapses will increasingly be of a planetary scale. Dismal macroeconomics consequence will be much more than inconvenient.

Once a true social business model has been planted, a hybrid model can be renegotiated with those owners who want to take profit out of the communities that generated the surplus. However this must always be compounded with transparency if we want to protect virtuously spiralling systems from catching a cancerous conflict and so turning vicious… Understanding Dr Yunus’ model provides the only way out I know of with all the crisis that have now converged in global financial meltdown. These include Soros’ notion that from the outset globalization has had some macro fallibilities designed into it, and the Unseen Wealt


(chris macrae) #3

continued

Unseen Wealth school that proved in 2000 that until goodwill multiplication had its own governance audit, the world’s largest organisational systems would compound unseen risks

Of course if you know of another book or open source that provides micro-up sustainability maps we can all network around, please tell us so we can look at how its maths compares with that Bangladesh’s have used for 30 years. It is at the collaboration core of the national brand strategy of Bangladesh to provide an above zero-sum model of a developing nation, as well as to openly replicate all the sustainability franchise solutions it finds to other nations who could benefit by ending poverty. A community to community world trade 2.0 if you like.

To celebrate the second anniversary of the Nobel Prize, Yunus 1000 bookclub chipped together to fund Yunus10000 dvd- an all hemisphere dialogue with 10000 youth and yunus alumni, designed around free dvds with 25 social business mapmaking good news video conversation starters contributed by entrepreneurs who work deeply with Yunus and/or social business modelling. Mail me chris.macrae@yahoo.co.uk (usa 301 881 1655) if you would like to get involved in hosting a dvd dialogue, or visit one of our 3 virtual reconstructions (in week 2 of this 52 week social action network’s life)

yunus10000.com - good news headlines emerging out of dialogues, and signposts to action subnetworks in such areas as health, clean energy, internet for the poor

collaborationcafe.tv - a quick meeting format for 10 people to work out what their city’s and network intersections can do next and connect with parallel cities in other hemispheres

microprosummit - in under a decade, microcreditsummit took safe banking to 100 million poorest families worldwide - is it time to discuss what other errant monopoly rules are designed into professions that haven’t changed how they judge system for 100 years- let alone since global made us all (and hi-trust flows) more connected than separated?


(chris macrae) #4

I have been collecting a lot of information and networking friends round dr yunus’ life works over the last 3 years. With Dr Yunus turning 70 tomorrow a brief summary perspective may help

For 30 years 1976-2005 Dr Yunus tested and proved 10 times more economic designs for advancing the lot of poorest parents in Bangladeshi villagers. The Grameen microcredit system was never just a bank -also being a community market space and knowledge hub (centre) for every 60 village members ensuring all their job creation productivity was reinvested back in sustainability goals for the community that they had defined in the members 16 decisions. One of the biggest events in microeconomics happened when dr yunus (on behalf of the poorest women investors in the world) got mobile franchise in 1996 at cents in the dollar as a consultant had predicted Bangladesh would only ever use .25 million moboles. Today over 40 million Bangladesh mobile users thrive and Grameen phone is the country’s largest compny; and the 100000+ village banking hubs interconnect 8 million Grameen members (Grameen telephone women being just the first wave of the extraordinary social business investment GrameenSolutions.com and BankaBillion.

The first book in the dr yunus social business series helps people understand every type of life enhancing micro franchise that Grameen has open sourced over these 3 decades.

Dr Yunus own focus started to change in 2005 after Paris meeting offered his Grameen branding 4 global partnerships with 2 corporations, a university business school and the employment and youth ministers of the French government. He is now absolutely clear that the main focus of the rest of his life as he enters his 7th decade is forming collaboration partnerships as global grameen becomes the world’s favourite branding of sustainability partnerships. There is so much technology out there whose marginal costs in experiments to end poverty and communally job create is near zero when Grameen partners come together round the biggest sustainbility goals that youth can dream of realising through the 2010s http://erworld.tv . This is the subject of Dr Yunus’ 2nd Social Business book published May 2010 and network alumni launched last November at Volkswagen’s conference theme centre Autostadt Wolfsburg videoed above - if I can help map you to where paetnerships are forming on what sustainability experiments please contact me at any time chris.macrae@yahoo.co.uk ; editior of fan web globalgrameen.com and host of association of family foundations isabellawm.com. Our next co-sponsored yunus weekend is Glasgow 4 July which microeconomics collaboration networks round Dr Yunus have also dubbed Interdependence day.
517-ScariestProfession.doc (369 KB)


(chris macrae) #5

Norman Macrae Foundation sponsored 2000 youth to read this boom http://yunusbook.com and 10000 to dvd it http://yunus10000.com - there's a lot to debate around it at a case by case level - if you have case from the book that you would like updated news on npelase tell me chris.amacrae@yahoo.co.uk http://youthcreativelab.blogspot.com