Nobel Laureate Muhammad Yunus, founder of the fabled Grameen Bank which has empowered many thousands of poor people in his native Bangladesh and now has a branch in New York that gives small loans to poor immigrant women, pitched his “social business” mantra to a small audience on Thailand on April 10.
In the Thai context, the principle echoes somewhat; it recalls the “sufficiency economy’’ espoused by King Bhumibol Adulyadej – essentially, living modestly and in moderation, rather than in greed; and being self-sufficient.
But the “sufficiency economy” concept has had a lukewarm reception in Thailand, seeming to confuse analysts in an overwhelmingly Buddhist country where the pursuit of material gain is as strong as anywhere else in the world, notwithstanding the Buddha’s advocacy of a balanced middle path.
Prof Yunus’ model blends some capitalism, but shuns what he calls the selfish pursuit of profits. It is laid out in detail in his 2010 book “Building Social Business” with the subtitle “The New Kind of Capitalism that Serves Humanity's Most Pressing Needs.”
The idea of social business is not new; one version – cooperative networks - is around 150 years old. But Prof Yunus has become the new messiah, saying social business is the answer to a more equitable societal order.
He and his Grameen Bank organisation jointly won the Nobel Peace Prize in 2006 and shortly after started a political party - and ran into a rude reality check when he was savagely attacked by Bangladesh prime minister Sheikh Hasina who launched multiple investigations of his Grameen finances. He has since apparently given up on political ambitions, and now at age 74 but not short of energy, travels the globe promoting the social business model.
In Thailand to discuss the launch of a ‘’Business Design Lab’’ with the Asian Institute of Technology (AIT) and officials from the Thai Social Enterprise Office (TSEO), he hopes it will help young people in particular, get into social business.
This is not the corporate social responsibility (CSR) of big companies, which he dismisses as a face saving device. His ‘’Yunus Centre’’ website defines social business as cause-driven. As such it should achieve a social objective – like health care or housing, or financial services, for the poor. And while it should certainly make money, it should not be run on the principle of dividends.
In Bangkok he gave, as an example, the creation of a small company with a small loan, training young people to incubate it, and letting them take over ownership as they expand the business while paying back the loan.
“All we have to do is create a space (for young people),” he told an audience of about 100, mostly alumni of the AIT.
Later in an exclusive interview with The Straits Times he said the ballooning of unemployment after the financial crisis - especially in southern and even in western Europe - and on the other hand the “retiring” of still vigorous, talented and older people while they were still productive, was a worry.
“You have a talented working population pushed out of the economy, young population not brought in, and in between a smaller playground for people,” he said. “Here social business fits in neatly, it is about creativity, you are not looking at making money for yourself. And then a whole new world emerges which was lost when you were blinded by the pursuit of profit maximisation.
“Normally you will not set up a factory if you are not assured by your consultant or expert that your rate of return on investment is above whatever, say 20 per cent. But the moment you come to this from a social business perspective even a below 20 per cent return becomes attractive.’’
“The world is all about making money,” he said. “Economics the way we are teaching it, is all money centred. Money has become the supreme authority. That is the wrong message.
We say money doesn’t make me; I create myself in my own way, and I have the creative power to solve the problems of the world and I want to use that creative power.
“That is the window we are trying to create, by creating social business – a window to express the selflessness we all have. We know how to express our selfishness, we have been taught that. But we have never been taught to express our selflessness.’’firstname.lastname@example.org