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

Creating a World Without Poverty: Social Business and the Future of Capitalism | Muhammad Yunus | A noble dream

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Creating a World W...

	Creating a World Without Poverty: Social Business and the Future of Capitalism Muhammad Yunus PublicAffairs, 2008 - 296 pages average customer review:based on 23 reviews view larger image
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highly recommended

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, because it 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. Welcome to the world of social business, where the creative vision of the entrepreneur is applied to today's most serious problems: feeding the poor, housing the homeless, healing the sick, and protecting the planet.

Creating a World Without Poverty tells the stories of some of the earliest examples of social businesses, including Yunus's own Grameen Bank. It reveals the next phase in a hopeful economic and social revolution that is already under way?and in the worldwide effort to eliminate poverty by unleashing the productive energy of every human being.

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Excellent primer for the emerging field of social businesses

As someone in the midst of trying to make a small business run within the lines of corporate social responsibility, I've really wrestled with the inherent problems with the whole "triple-bottom-line" movement. Primarily, I've wrestled with how one chooses which of the many bottom lines as they compete over and against each other. Yunus tackles this issue head on with his idea of the "social business" that is a single-bottom-line business: the bottom line of social transformation. I particularly like that he builds his case around the remarkable example of the Grameen-Danone social business partnership in Bangladesh. Time will tell if that experiment proves sustainable, but nonetheless, it's super helpful to have something tangible to point to rather than just a series of ideas or arguments. Because Muhammad Yunus' work with the Grameen Bank has won him the right to preach without real data, it's all the more inspiring to hear his examples from the dozens of other social businesses within the Grameen family. I should mention that the last 1/3rd of the book veers into some potentially "wishful-thinking" territory, I'd nevertheless heartily recommend this book to anyone interested in the field, and was glad to give it 5 stars.

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A noble dream

Poverty is a threat to peace, hence the Nobel Peace Prize.
But his arguments for social business are also a contribution to modern economic theory.

I first read the epilogue ( the lecture for the Nobel Prize), which summarizes the ideas.

Recommended for anyone interested in human development , in particular the situation of the "bottom billion".

Social Business, a concept that can save this world

When I bought this book, my expectations were primarily to get a deeper insight into micro credit, since Prof Yunus is best known for this powerful means for empowering the poor to free themselves from the shackles of poverty. However, from the first chapter itself, it was abundantly cleat that this book is about the novel concept of Social Business, a paradigm shift in the way we look at business. We have all along assumed that Business and profits inseparable Siamese twins, and the "aim of all business is to produce a surplus" and that the surplus is always assumed to be in the form of profits for the shareholders. On the other hand when we think of social welfare, we assume that this sector that includes Health Care, Sanitation, Primary Education, Eradication of communicable diseases etc are ideal cases for Government to take care, and if it falls short, NGOs and charitable organizations step in. These activities by definition need investments with no returns at least in tangible terms. Tax collections and charities from individuals and trusts are spent with no expectation of financial returns.

Between these two extremes, and mutually exclusive zones, lies the concept of a Social Business as propounded by Prof Yunus, and I am amazed by the enormous potential that this form of Organization can unleash to transform this planet, especially for half of the world's population that lives on less than a couple of dollars a day.

The Grameen Danone venture in Bangladesh is a classic example of a Social Business as explained in most chapters of the book. The objective of this organization is to maximize distribution of nutritious yoghurt to poor children in Bangladesh, who otherwise do not receive essential nutrition from their regular diet of carbohydrates. The product "Shokti Doi" is a highly affordable, tasty and nutritious product, packaged in 80 gram units. In order to be acceptable to the children, it has to be tasty- a little sweet. It competes with all other popular branded yoghurts in the market in terms of texture and taste, yet is far superior in terms of nutritious value and vitamins and has to be very affordably priced. While the conventional producers aim at maximizing consumption of their product with the aim of maximizing revenue and profits, the Grameen Danone venture aims at maximizing the reach of this product to the target segment with the aim of improving the health of poor children through this nutritional input. While conventional manufacturers aim at economies of scale by erecting large scale plants and linking the national distribution through automation of supply chain and cold chains, the focus of the Grameen Danone venture is to set up small scale local plants, with local inputs and produce just enough to meet local needs. Surprisingly the latter approach proves to be cost effective, and with the help of local Grameen women, the product is distributed to the target segment within 48 hours of its manufacture, eliminating the need for expensive cold chains.

Investors in a social business are not giving away money as in the case of a charity, where they forget their money once it is donated. The Social Business is self sustainable financially, and gives back the original investments to the investors over a period of time, and nothing more. The investors do not receive any profits or dividends from the Social Business. The profits are retained for further growth and not distributed as dividends.

The Social business executes the laudable social objectives with the missionary zeal of a charity, with the efficiency and speed of a profit maximizing business. Hence, we have a unique business model to solve substantial social problems, as demonstrated by Grameen Danone in maximizing nutrition and health in poor children through affordable yoghurt.

The argument that social objectives and business goals are two different criteria that cannot go together (or that social welfare is at best a byproduct of a commercial business) is challenged and Prof Yunus makes out a very compelling case for a new form of business that can address global problems. It is amply demonstrated that free markets fail to address social issues that need large scale investments while government spending and initiatives of charities are inefficient and many times financially and economically unviable to achieve sustainable results.

It is time that we pay serious attention to the concept of Social Business through social MBA programs, public and private sector cooperation and necessary legislation to define this form of business so as to ensure that the governance structures, business processes and accounting standards emerge to establish the new form of organization that can play a major role the solving global problems, especially in relation to elimination of poverty from the face of his earth.

A well deserved five star rating for this classic that has the power to change this world, forever and for the better.

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"Creating A World Without Poverty" by Muhammad Yunus

In "Creating a World Without Poverty: Social Business and the Future of Capitalism," the follow up to "Banker To The Poor: Micro-Lending and the Battle Against World Poverty", Muhammad Yunus describes a new economic entity he calls the "social business." In short, this is an organization that has a specific social goal as opposed to regular business, for which profit is the only goal.

Yunus is most famous for receiving the Nobel Prize in 2006 along with his Grameen Bank, which is the world's largest maker of microloans. Since then, microlending has come into vogue, and the term has become very popular, though I venture that many people who use the term do not understand the implications. The idea is exciting enough that you don't need to understand; money is given like charity, but then gotten back like an investment. It's like the mystical quarter on a string that allows you unlimited candy from the vending machine. Except, now it's real.

Yunus is not the inventor of microlending, but the first person to effectively practice it on a large scale. He says, "it was appropriate that the Nobel committee in 2006 chose to award Grameen Bank, not the Nobel Prize for Economics, but the Nobel Prize for Peace. By lifting people out of poverty, microcredit is a long-term force for peace" (105). In Bangladesh, the only country in which Grameen Bank operates "80 percent of poor families have already been reached with microcredit" (66). The evidence shows that Bangladesh has undergone many improvements in quality of life for the poor that can specifically be attributed to microlending.

The reason that this book is almost 250 pages is because Yunus is serious about proposing Social Business as an idea, and he lays out strategies for social entrepreneurs and pre-emptively tackles the naysayers. Yunus is a man who knows his audience. I will leave you with this:

"Young people all around the world, particularly in rich countries, will find the concept of social business very appealing. Many young people today feel frustrated because they cannot recognize any worthy challenge that excites them within the present capitalist system. When you have grown up with ready access to the consumer goods of the world, earning a lot of money isn't a particularly inspiring goal. Social business can fill this void" (39).

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High on rhetoric, short on action

Professor Yunus' book pales in comparison to his Banker to the Poor - this current book is light on action and heavy on rhetoric. It does tell a story about how he was able to create a social enterprise - using his connections as a Nobel Prize winner and book author.

It does not give any type of action plan on how the typical person could arrange a social business or even more their company more toward a social function. I was disappointed as it was more a book of opinions and far-flung ideas about how to create institutions like social stock markets, etc., and little about how to actionably help the poor.

In all, an interesting book, but mostly due to Yunus' writing style and easy of telling stories. It contains some short history but not enough action. I highly prefer C.K. Prahalad's Fortune at the Bottom of The Pyramid for more direct guidance on how this has been done.

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reviews: page 1, 2, 3, 4, 5

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