Creating a World Without Poverty: Social Business and the Future of Capitalism | 
|  | | | Title: | Creating a World Without Poverty: Social Business and the Future of Capitalism | | Author: | Muhammad Yunus | | Publisher: | PublicAffairs | | Type: | Book / Hardcover | | Publication Date: | 07 January, 2008 | | ISBN / ISBN-13: | 1586484931 / 9781586484934 | | List Price: | $26.00 | | You Save: | $8.84 | | Amazon Price: | $17.16 | |
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Product Description
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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Customer Reviews:
• Someone Rewrite The Capitalist Textbooks 17 May, 2008
Yunus has refined the problems of the current capitalist structure by divulging common sense and promoting the new idea of a social business. Here is a book loaded with optimistic ideals for a brighter future that anyone will doubtlessly enjoy, though many may also be skeptical. One looks for meaning in life, a desire unsatisfied by the PMBs (profit-maximizing business) of today. Everyday, citizens of the developed world are bombarded with the onslaught of advertising promoting products, whereas Yunus suggests for the new social businesses to serve a similar function to public service announcements, promoting healthy lifestyles. In a world where the poor are shunned and poverty deemed an inevitable problem, nothing can be done. However, Yunus suggests that we rid society of the ills of poverty by rejecting this idea and striving towards a goal to end poverty. "Creating a World Without Poverty" is an engaging journey from front to back that serves as a beacon providing aspiring entrepreneurs with a chivalrous goal to solve the problems that too often are left for the next generation.
- Reviewed by customer ID: A21OXCWLZVI0WF
• Good Intensions, But Not Completely Good 06 May, 2008
I know that my review will be unpopular, especially in light of someone else who said this book deserves 100 stars. When I first read that Mr. Yunus said that our children will one day go to museums and will talk about how people used to be in poverty, I was inspired. An optimistic view like this is exactly what this world needs more of I thought. Then I started to read exactly what this Nobel Peace Prize winner is doing to make poverty disappear, and I was let down. For all who do not know, Mr. Yunus is a pioneer in giving small loans to people, especially women, and charging them interest when they repay the loans. That is it, in a nutshell. While I believe it is a noble thing to give poor people money that would not be able to go to a bank to get a loan, I can't fully accept that interest is being charged because it conflicts with a verse in the Quran (2:275) which says that interest (riba) is a sin. Riba is a loan with the condition that the borrower will return to the lender more than the quantity borrowed.
Now what the heck does Islam have to do with saving people from poverty you might ask? God does not want these people to suffer. I agree with that. But he also does not want us to solve our problems through means which are considered sinful. Mr. Yunus has not fully addressed this issue and he has merely argued that the lack of excessive interest in micro-lending is consistent with the Islamic prohibition of usury. Islam has nothing against Capitalism and it encourages free trade, but Allah has made guidelines for trade and that includes not making a profit off of money itself.
There is debate in Islam on whether excessive interest or interest in general is forbidden with the latter being the majority opinion. But Yunus says that his microcredit is moderate and not excessive at all.
It has been reported that borrowers have become swamped with debt and it has brought some communities down. The interest charged by Grameen Bank is higher compared to that of traditional banks so if a person has trouble repaying the loan in a given time, he or she will suffer financially. He mentions on his website that the Indian Prime Minister called him a messiah, yet a former Prime Minister of Bangladesh, his own country, called him corrupt. I would refer you to read "Is micro-credit a macro trap?"
He says something on p55 that I think really brings the issue of poverty to its roots. He says when men make money, they spend it on themselves and when women make money, they spend it on the whole family. In Islam, a man must take care of his family. It is his responsibly, not the woman. When I say man, I mean, Father, husband, brother, etc. If he does not fulfill his duties, then I guess we need microcredit to save the day. My point is that Islam is the answer to poverty. It is the way and it is the light. Its not just about getting money to the poor, it's about a whole system of life that is consistent with justice. There should not be one woman in Bangladesh or anywhere in the world who must work for money. They should only have the option to work. We have men, who are Muslim,that are not taking their duties seriously and everyone suffers because of that. We have enough food in the world to feed everybody and still have some left over, but we still have people suffering from hunger. It is not a lack of resources; it is a lack of justice in the distribution process. Americans throw out 200,000 tons of food that can be eaten every day. There is so much that I can say on the economic conditions that we are facing but I wont. My advice would be to verify every piece of information that you get before you accept it.
- Reviewed by customer ID: A3MWMIQDYXLSRT
• A Game Changer 03 May, 2008
Dr. Yunas has taken some of the simplist elements of capitalism and coupled them in tandem with some of the higher level elements of human nature to form a framework for improving the quality of life on a massive scale. It is the improvement of one life, in one locale that builds a powerful statement of all things can change notably for the better. His ideas are translatable into action and he demonstrates the capacity to "get it done" in a remarkably simple way despite the complexity of the world as it exists today.
- Reviewed by customer ID: A3CFTI3A6K70AN
• "the Missing Piece Of Capitalism" 21 May, 2008
"No one who cares about humanity," writes Muhammad Yunus, "is satisfied with a world in which a few hundred million people enjoy access to all the resources of the planet, while billions more struggle to survive." But that's our world. Yunus cites one study that concluded that in the year 2000, "the richest 1 percent owned 40 percent of the world's assets, and the richest 10 percent owned 85 percent. By contrast, the bottom half of the world's population owned barely 1 percent of the planet's assets."
This disparity of resource distribution is wrong in practice, says Yunus. With globalized capitalism devouring diminishing resources, it's unsustainable; it also threatens global security. But extreme poverty is wrong in principle, too, because it deprives billions of human beings of the most basic of all human rights, the right to live a decent life. For over thirty years, Muhammad Yunus has worked with remarkable creativity, perseverance and vision to rectify these stubborn inequities. Most people know him as the founder of the Grameen Bank in Bangladesh, for which he was awarded the Nobel Peace Prize in 2006. Today the Grameen Bank gives collateral free micro-loans to 7 million of the poorest of the poor in Bangladesh (97% of whom are women). Since its inception they have made loans totaling $6 billion, with a repayment rate of 99%. Yunus tells this story in his autobiographical bestseller Banker to the Poor; Micro-Lending and the Battle Against World Poverty (1999, 2003).
His newest book continues the story of the many and latest permutations of the Grameen vision to eradicate poverty. This includes a stable of twenty-five Grameen replicants that specialize in everything from solar energy and internet kiosks to fish ponds, textiles, cell phone ladies, and livestock breeding. But all these are mere "stepping stones" in Yunus's fertile imagination. The focus of his newest book is what he calls "social business." While normal businesses must focus on profit-maximization, and can even be sued by shareholders if they don't, a "social business" is what Yunus calls a "non loss, non-dividend" business whose primary objective is some social benefit. A social business competes in the market place with every other business, it must cover its costs, and it reinvests profits back into the company. This is a far more radical idea than mere corporate social responsibility, which in his mind tends to window-dressing and has an inherent conflict of interest between the requirement to maximize profit and the intention to do good.
Sound crazy? Well, read this book and its extended case study of how Grameen partnered with Groupe Danone of France to create what Yunus calls "the world's very first consciously designed multinational social business," launched in 2006. This was followed by Grameen's eye care hospitals. He thus envisions in social businesses a "giant leap" forward for addressing poverty in a scalable, replicable way. "Social business," he argues, "is the missing piece of the capitalist system." They do what government, NGOs, charity, and multi-lateral organizations like the World Bank can never do. Yunus is the quintessential dreamer--his wish list for the world of 2050 has nineteen bullet points; but read this book and his previous one and you'll also see that he's the consummate doer.
- Reviewed by customer ID: AQ990HW13DP08
• Broadening The Ownership Of Capital 17 April, 2008
Creating a World Without Poverty: Social Business and the Future of Capitalism, Muhammad Yunus, Public Affairs, 2007
Muhammad Yunus is a hero to those of us who seek to broaden the ownership of business. As a Bangladeshi economics professor, he wanted to do something about the crushing hunger and poverty he saw around him. He gathered 42 borrowers from the village near his campus and lent them a total of $27 from his own pocket. He followed that by guaranteeing bank loans to the poor. In 1983, he started Grameen Bank, which shared with him the 2006 Nobel Peace Prize. The results, from his acceptance speech:
"Today, Grameen Bank gives loans to nearly 7.0 million poor people, 97
percent of whom are women, in 73,000 villages in Bangladesh. . . . Since
it opened the bank has given out loans totaling about US $6.0 billion. The repayment rate is 99 percent. Grameen Bank routinely makes a profit. . . .
58 percent of our borrowers have crossed the poverty line."
Grameen Bank has become the model for a worldwide microcredit movement. By 2006, microloans had been extended to 100 million of the world's poorest families.
In this book, Professor Yunus argues for a new structure, the "social business," which is "a business that pays no dividends. It sells products at prices that make it self-sustaining. The owners of the company can get back the amount they've invested in the company over a period of time, but no profit is paid to investors in the form of dividends. Instead, any profit made stays in the business--to finance expansion, to create new products or services, and to do more good for the world."
Governments, charities and "profit-maximizing businesses" are not enough to solve the problems of poverty, disease and environmental degradation, Professor Yunus argues; "we need a new type of business that pursues goals other than making personal profit--a business that is totally dedicated to solving social and environmental problems."
He makes a distinction between social businesses and "socially-responsible" businesses, which are intended to serve a social objective, while making a profit. They have a fatal flaw, according to Professor Yunus, because their executives "will gradually inch toward the profit-maximization goal, no matter how the company's mission is designed."
The social business is intended to make a profit, but not to pay dividends. It would plan to pay back the amount invested over time, which might be from five to 20 years. Shareowners would continue to own the business after they were repaid their investment. The motive of making a profit on the shares would be replaced by pride in achieving a social objective. Many of the investors would be individuals and institutions that make charitable gifts. They would see the benefits from a business that was to return their funds, which they could use to invest in more social businesses. (However, earning enough after-tax profits to cash out investors in five to 20 years is a big hurdle for a new business. It could put the social business at a real competitive disadvantage in pricing its products and services. Most U.S. businesses don't pay any dividends, while many others keep dividends at less than a three percent yield on the shares' market value.)
"Who will invest in a social business?" This question is a section of the book. The answer given is that money will come from people who would otherwise support charities, as well as from charitable foundations and from businesses that fund charitable activities. A tax exemption could provide government support for social businesses. Shares in social businesses would be traded in aftermarkets, with the value determined by "the social benefit produced," rather than profit expectations.
What about capital needs larger than those served by Grameen Bank and the microcredit movement? The book lists some 25 members of the "Grameen Family of Companies," which include social businesses and support organizations. Grameen Fund provides venture capital, taking a 51% equity ownership. Grameen Business Promotion Company guarantees loans from Grameen Bank of up to $10,000 or more. Grameen has recently entered joint ventures with Danone, the world's largest yogurt company, and Intel.
A huge potential project described is "to create world-class port facilities for the growing economies of Bangladesh as well as her neighbors, and to build a network of superhighways to connect those countries with the port facilities." The money would come from "social investors" or donor countries, who would later sell the project to a trust. In turn, the trust would sell "shadow shares" to poor people. These "shadow shares" would not represent ownership of the facilities but would entitle holders to any dividends declared by the trust board. Shares could be purchased on credit, to be paid from dividends. The shares could only be sold back to the trust. (If this project goes forward, perhaps Professor Yunus would consider having the shares be direct ownership, with voting rights, so that the poor families could be part of a community of business owners.)
Grameen Bank's great success flies against some basic economic assumptions, according to Professor Yunus. One is that "all people are motivated purely by the desire to maximize profit." (By "fear and greed," in Wall Street terms.) Another "is the assumption that the solution to poverty lies in creating employment for all." Self-employment is the alternative supported by Grameen Bank. Millions of its borrowers have crossed the poverty line because they now have earnings from both their labor and their invested capital. (The next progression is when individuals have enough income from their capital alone that they don't need to sell their labor. They can be the ones who devote their time, and discretionary investment income, to solving social problems.)
There is a brief section in the book that describes a second kind of social business, one "owned by the poor or disadvantaged" where "the social benefit is derived from the fact that the dividends and equity growth . . . will go to benefit the poor." Grameen Bank itself is "a social business by virtue of its ownership structure," since 94% of its shares are held by its borrowers. In 2006, it earned $20 million and paid dividends to its shareowners.
The error of most programs to alleviate poverty, Professor Yunus writes, is that they assume that providing jobs and job skills is what is needed. "But if you spend enough time living among the poor, you discover that their poverty arises from the fact that they cannot retain the genuine results of their labor. And the reason for this is clear: They have no control over capital. The poor work for the benefit of someone else who controls the capital." (Beyond microcredit could be broadening the ownership of capital so that the formerly poor can become independent of the return on their labor.)
- Reviewed by customer ID: A1XB236N19ZS9P
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