It was a privilege to see Nobel Laureate Muhammad Yunus talk on his concept of ‘Social Business’ last week.
He argued that our global economic system relies on two false asumptions:
- That a comparatively small proportion of the human race possess an entrepreneurial spirit, and that most people are ‘followers’ rather than ‘innovators’
- That capitalism must be based primarily on our selfish instincts if it is to function
Against 1, he said that most people, given the chance, are in fact hugely innovative and productive. The problem, rather, is that our social frameworks empower only a minority to fulfil that potential, leaving others disenfranchised. For example, the most common reaction when the Grameen Bank offers to lend to poverty-stricken women is that they say their husbands take care of money matters, not them. This is as much the case in New York as it is in Bangladesh. However, once they are persuaded otherwise, they more often than not start up profitable businesses. It is our social system, then, that is falling short, not people themselves.
Proponents of 2, says Yunus, have a far too pessimistic picture of humanity. For him, there is plenty of room for business to build on positive human attributes such as generosity, kindness, and the desire to help others. Such ‘social’ businesses, like the Grameen Bank, are started up not with profit in mind, but as a means to solve specific social problems. It is not that we shouldn’t ever run businesses to make profit – after all, we all need to earn a living. However, the point is that the the profit model should not permanently crowd out other potential models.
It follows, then, that attitudes underpinning the global economy need to be fundamentally altered. The challenge is to re-work our social structures to unleash the innovative power of all segments of society, and to encourage people to run social as well as profitable businesses.
This, Yunus said, is already happening and is showing great potential. For example, the Grameen Bank has worked with Danone, the yoghurt producers, on a not-for-profit social business that provides starving children throughout the world with high-nutrient food products. Indeed, as a rule, shareholders are keen for their companies to get involved. On Grameen projects similar to the one with Danone, 98% of shareholders have responded affirmatively when asked whether they are willing for a percentage of their dividend to be used for social business purposes.
It seems, then, that all the ingredients for a more benevolent and socially productive capitalism are at our fingertips. The question is whether enough of us can replicate Yunus’ vision and drive to unleash its potential.