Book Review - Creating a World Without Poverty by Prof. Muhammad Yunus

chillibreeze writer — Dheep J Mahipally

“Poverty is the worst form of violence,” proclaimed Mahatma Gandhi. Indeed, by denying the most basic of human freedoms, poverty imposes huge limits on one’s material, social, emotional and spiritual well-being. Capitalism, ostensibly the best system invented so far, has fallen far short of its promise in bettering the human condition.

It is here that the ardent cry of Prof. Muhammad Yunus, for a much-needed reform of capitalism, assumes significance. In his book “Creating a World without Poverty” subtitled “Social Business and the Future of Capitalism”, he contends that the form of capitalism practised today, assumes the human being to be a one-dimensional creature, his sole objective being profit-maximization. This narrow view has led to systems that incentivize profit-seeking behaviour and discourage expression of the social, emotional and spiritual sides of the human personality. Prof. Yunus contends that we can enable the multifaceted and creative expression of human personality and hence alter the poverty equation by recognizing and encouraging a new kind of business - a social business.

A social business is different from a conventional profit-maximizing business in that its bottom-line is not economic, but social. It measures its success by the promotion of social well-being. It also differs from a non-profit organization in that it unlike the latter, it is self-sustainable and hence does not rely on a steady flow of donor funds.

A social business can achieve its objectives in two ways. In the first model, the business is owned by investors who seek social benefits such as poverty reduction, child education and so on. The investors, seeking psychological, spiritual and emotional rather than economic returns, invest in the social business for the same reasons as they donate money to charity. The investors can recoup their investment, as the social business attains full cost recovery after a certain period of time. However rather than distributing to the owners/shareholders, profits obtained are fully reinvested in the business. Hence this is a non-loss, no-dividend model.

In the second model, the social business operates as a profit-maximizing business that is owned by the poor or the disadvantaged. Hence profits incurred by the business go directly to the poor, thereby helping them reduce their poverty or to escape it altogether.

What is wonderful about social business is that it recognizes the human being for what he is – a multidimensional being. It provides a system for him to do good to his fellow-beings in a self-sustainable way. Social business offers alternative career and life paths to students and other individuals hungry for a life rich in meaning beyond profit. Most important, it will enable the poor to express their enormous gifts for entrepreneurship, creating newfound abundance for themselves, their families and communities.

Prof. Yunus and the few others who think like him have already put these ideas to work and given a new lease of life to so many poor people. However in order to encourage more people to set up, invest in and work for social businesses, we need to put in place supportive systems. Hence Prof. Yunus advocates entities such as a social stock market, social MBA, ‘Social Wall Street Journal’ and so on.

Prof. Yunus believes that social businesses can help us put poverty in museums. Let us hope that we are able to lead and participate in a revolution that ushers in innovative social businesses, thereby taking us closer and closer to this apparently formidable and noble goal.

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—About our writer:

Dheep says, "I am a graduate of IIT Kharagpur and have a work experience of four years with Oracle as a senior business applications engineer. Currently I am pursuing an MBA from IIM Lucknow. My interests include general management, economics, mathematics, entrepreneurship, social welfare and the fight against poverty."

Book Review - Creating a World Without Poverty by Prof. Muhammad Yunus

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