Wednesday, September 05, 2012

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

Awesome meeting kind and grandfatherly Dr Yunus
There are 2 instances in the book that will cause a stir in your heart:

First where by when he realised with just USD 27 he can lend these money to 42 poor villagers to start their business and hence alleviate them out of poverty.

Two is when an illiterate lady scribbles a signature to get a loan and gets the thrill from the fact that “ they know me from my signature!”

In this book, Dr Yunus is telling us to change the lens at we view the world:

  • The poor are not incapable - the fact that the poor is alive shows that they know how to survive. 
  • The assumption is that to help the poor, one must give them jobs. But no! His priority is not to teach them new skills, but to help them to make use of their existing skills. 
  • Entrepreneurship is every where and the poor can be self employed.
  • The poor are poor mainly also because the bank only lends to the rich - the ones with the collaterals, not the ones who needs the money most. 
Honestly, at times, sometimes I found his idea so ridiculous that I think that he is naive - especially on the last chapter where he wants all of us to imagine the ideal world that we want and we then strive for it.  This difference is probably the reason why he is THE Nobel Laureate. 

Other notes:
  1. In a profit maximising business: the only key question is how can we get people to buy more of our products at a higher profit than last year. Whether the product is necessarily becomes irrelevant.  Social Business is non loss, non dividend.  It is cause driven rather than profit driven. Running a social business is still like running a profit maximising business. You still find the best person for the job and pay him the market rate.
  2. Unique proximity model:
    • Villagers buy yogurt from a local factory that uses local labour and gets the milk from the cows in the same village that it sells the yogurt to.

To end off with some quotes:

People want meaning in their life – the kind of meaning that only comes from knowing that you are doing your part to make the world a better place.

We tend to be so busy with our everyday work and enjoying our lives that we forget to look through the windows of our lives to find out where we are right now in our journey, and take time off to reflect where we wish to go ultimately.

Poverty exists because we've built our philosophical framework on assumptions that underestimate human capabilities.  We've designed concepts that are too narrow - our concept of business (which makes profit the only viable human motive), our concept of credit-worthiness (which automatically eliminates the poor), our concept of entrepreneurship (which ignores the creativity of the majority of people, and our concept of employment (which relegates humans to passive receptacles rather than active creators.)

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