Monday, October 08, 2012

A new form of social ‘Capitalism’

Muhammad Yunus, Nobel laureate, explains why creative capitalism in fact holds all the answers to improve human life, as told to B&E’s Neha Sarin

This Chittagong University economics professor is better known as the man who won the Nobel Peace Prize in 2006 for his thirty-three year old dream venture – Grameen Bank. Muhammad Yunus, the Father of Micro-credit and a staunch believer in the principle of the ‘social business enterprise’. So while the world hails ‘conventional capitalism’ and accepts the modern theory of ‘creative capitalism’, Yunus – can boast of his brainchild Grameen Bank’s 2,422 branches with aggregate loans of more than $6.8 billion (lent to more than 7.4 million people) – believes that he perhaps had always been a ‘creative capitalist’! The only difference is – he called it a socially favourable economic act. Business&Economy presents an exclusive one-on-one with one of the ‘Greatest Entrepreneurs of All Times’.

B&E: What are your viewpoints about creative capitalism? Is it necessary?
MY: It’s good to be creative and there is no doubt about it. I am very happy that Bill Gates is promoting this idea of ‘creative capitalism’. By doing so, he has recognised that the current form of capitalism is not doing its job as we all expect it to do and what we want to see happen; it is not addressing poverty, healthcare problems and many more social issues. He is mentioning and highlighting, and he is admitting that we need creative capitalism to do the job, and do it well. However, it really doesn’t come with a guarantee of how well it will be done.

If you just look at the word ‘creative’, it means the very essence of progress. So capitalism has to be creative too. But the question is whether this creativity should be put in the present restrictive format that we drive or rub-in this format and define newer boundaries for capitalism. We simply need to look at the term in a new way, perhaps just like the one when I started by trying to bring in social reforms.

Today, ‘social business’ is the missing element in capitalism, and therefore should be included in the system well. The present system is in the business of making money, and textbooks say that the very mission of business is profit maximisation… so no matter what else you want to add with it, the mission remains unchanged. Why don’t we clear-out the sole motive of profit maximisation from business and include social business in it as well; something which will exclusively do good to people. When it comes to me, it was all about ‘others’ and nothing for me as an investor. In no way do I want to benefit myself. As a person, I will be investing in both types of businesses – one in which I will make money, and another in which I would be investing that money to change the world… and that itself should be the ultimate goal for capitalism.

B&E: What, as per you, are the benefits of ‘creative capitalism’?
MY: Honestly speaking, I don’t know if I am really following any kind of creative capitalism. I don’t believe in creative capitalism! I am talking about a new form of capitalism here, which is a nouveau form of completely redesigned and restructured capitalism, where there is room for two kinds of businesses and not just one. So what I have done is that I have created space for new types of businesses like the Grameen Bank where investors don’t really make any profit. Also I have designed a profit maximising business which is all by poor people & is also a social business within the Grameen Bank. I don’t make any money out of that, I don’t own any share or whatsoever in any of the social business I have created. Coming back to your question of creative capitalism; No! I haven’t done any creative capitalism yet and haven’t benefited from it.

Source : IIPM Editorial, 2012.

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