A New Capitalism
Muhammad Yunus PublicAffairs, 2008, ISBN 9781586484934
MUHAMMAD YUNUS’ BOOK is an illuminating account of a remarkable man and a remarkable global movement. Many of us are already aware of the achievements of Yunus and the Grameen Bank, placed into the public spotlight by the award of the Nobel Peace Prize. However, perhaps less is known of Yunus’ global vision and ambition, which, driven by a deep humanity, are as large as they are compelling. In this book he carefully sets out a blueprint for a new economic order, powered by human motivations and interests unrecognised by the current system. What make these arguments so convincing are the numerous examples where Yunus, faced by abundant scepticism, challenged conventional wisdom and created successful new projects and businesses based on an entirely new economic and social model.
Over his career he has focused on finance, healthcare, nutrition, education and telecommunications, effectively creating a ‘quasi-welfare state’ within Bangladesh. For each new venture, he rejected the conventional charitable models, and elected to create self-sustaining and self-propagating institutions, to provide long-term solutions and social transformation. In almost everything he does, Yunus displays a compelling fusion of visionary idealism and meticulous pragmatism. He has a remarkable capacity to dream and create simultaneously.
Back in 1973, E. F. Schumacher’s Small is Beautiful was published: a brilliant analysis of the world economic order and an explanation of the limits of the capitalist model. Schumacher explained how perpetual growth in a world of limited resources was a path to destruction. He extolled the virtue of small-scale businesses harnessing the resourcefulness of individuals.
In many ways Yunus’ work may be seen as an extension of the vision of Schumacher, empowering many individuals to use their creative energies to build a better future for themselves, their families and their communities. Like Yunus, Schumacher believed in embracing technology, but saw that technology should be applied sensitively to meet human needs, instead of being imposed indiscriminately, without cultural, economic or environmental context. Many of Schumacher’s thoughts and visions appear to be closely reflected in the work of Yunus.
The central purpose of Yunus’ work is to present the case for a new kind of capitalism, to exist side by side with traditional capitalism. He makes it clear that he believes in the creativity and energy of free-market economics, but he also believes that the current model of capitalism is wrong, as it is based on a one-dimensional view of human motivations. Conventional capitalism, he argues, is based on the assumption that profit is the only motivator, denying a place for other powerful human instincts such as compassion and social cohesion. He cites many examples, of people working in NGOs, caring professions and philanthropy (of even the world’s most successful capitalists), as proof that other motivations are not only prevalent, but are waiting to be expressed.
Yunus also discusses the growing focus on Corporate Social Responsibility, with its so-called triple bottom line (economic, environmental and social). He argues that the pressure on senior executives from investors and other sources to maximise profit will invariably mean that social goals come a poor second. He believes that a ‘Social Business’ set up on the clear understanding that all investors, staff and clients embrace the same social objectives is much more likely to achieve its purpose.
Yunus provides many examples of potential social businesses involving microfinance banking, health, agriculture and infrastructure. He goes on to explain that such businesses would need to exist within a regulatory environment (just as conventional businesses and charities do) to prevent their manipulation by unscrupulous individuals. He develops a detailed vision of a parallel capitalist world, with Social Business Stock Exchanges, a Social Business Financial Times, Social Business Schools. It is fascinating stuff.
If it were not for the achievements of Yunus over the past thirty years, it would be easy to view such ideas as fanciful. However, Yunus is a serial entrepreneur who has developed a series of substantial enterprises in a wide range of fields, each with strong social objectives. He admits that some have been more successful than others, but he is a pioneer who has developed sophisticated business models through trial and experience. By any measure his success has been immense and it is hard to deny what has been demonstrated by living example.
Yunus sees poverty and inequality as major destabilising influences in the world and believes that the drive to alleviate global poverty is essential to the creation of a peaceful world. Towards the end of the book he sets out a broad and idealistic vision for the year 2050. He envisages a world without poverty, without frontiers and without wars. It is a deeply moving portrait, and with people of Yunus’ vision, energy and humanity, I sense it is within our grasp. This book provides a blueprint for a better future and will be a source of inspiration to those who wish to help to shape it.