Creating a World Without Poverty: Social Business and the Future of Capitalism

Citation

Mesure, H. (2008), "Creating a World Without Poverty: Social Business and the Future of Capitalism", Society and Business Review, Vol. 3 No. 2, pp. 176-177. https://doi.org/10.1108/17465680810880125

Muhammad Yunus, a native of Bangladesh, is the winner of the 2006 Nobel Peace Prize. Yunus was educated at Dhaka University. In 1972, he became Head of the Economics Department at Chittagong University. He is the Founder and Managing Director of Grameen Bank, a pioneer of micro credit; an economic movement that has helped lift millions of families around the world out of poverty.

In this first book published after his Nobel Prize, Yunus presents his vision for an innovative business model that would combine the power of free markets with a quest for more humane, egalitarian world that could help alleviate world poverty, inequality and other social problems.

In the last two decades, free markets have swept the globe, bringing with them enormous potential for positive change. But traditional capitalism cannot solve problems like inequality and poverty. The authors suggest the reason is in the basic flaw in the assumption of Adam Smith, that man is a one dimensional being, his only motive in the world is to maximize the profit. If profit maximization is the only yardstick of the success of a business, why should the corporations care about other factors like social responsibility, sustainability or social justice? Therefore, the dominant capitalism is hampered by a narrow view of human nature in which people are one‐dimensional beings concerned only with profit. In fact, human beings have many other drives and passions, including the spiritual, the social, and the altruistic. Yunus moves also the debate by arguing that the philanthropic approach in not enough. Simply donating will not change in depth the functioning of capitalism.

Therefore, Yunus and Weber propose another model of business, which they call “Social Business”. According to this business model, the goal is not profit maximization, but a specific social benefit, for example, providing nutrition among the population. The social business is not a charity, because, it returns the original investment back to the investor. But, it reinvests the profits back to the business to maximize its social goal. In this book, Yunus (2003) also explains again the concept of micro‐finance, a small amount of money, usually less than hundred dollars lent to the poor people, who can then use this money for running a small business. This generates income and helps them rise above the poverty level. According to Dr Yunus, the poor people always pay back the money. The authors explain also difference between micro credit and social business. Social business in not a way of financing it is a specific approach of doing business that is to say applying the entrepreneurship (as a social innovation under the double constraints of risk and scarcely as a way of doing things) to today's most serious problems: feeding the poor, housing the homeless, healing the sick, and protecting the planet. To illustrate their means, Yunus and Weber profile 25 businesses that follow more or less innovative and complete social business approach. Those businesses are a form of a non traditional capitalism. Those stories reveal what could be the next phase in a hopeful economic and social revolution that is emerging throughout the world. Notice once again, that Yunus is not an ivory tower economist, but a very down‐to‐earth pragmatist, who has founded a score of social businesses in his own country Bangladesh and other underdeveloped parts of the world. As a result of his work, millions of people have come out of poverty. The epilogue calls again that “poverty is a threat to peace “that was the theme of Yunus' Nobel Discourse.

The book is very readable. It is full of hope. The book could engage the reader and definitely enrich her/his world's view.