Book by Muhammad Yunus. Reviewed by Barbara Merz.
Creating a World Without Poverty could easily have been a retrospective. After all, its author has plenty to reflect upon. Instead, the book is unmistakably forward-looking. This book presents a compelling vision for the future of capitalism. It envisions a market where social businesses emerge to address social issues.
Muhammad Yunus could have rested on his laurels when he was awarded the Nobel Peace Prize in 2006. He could have simply recounted his quantitative achievements, such as: 7 million people served, more than 73,000 villages reached, at least 640,000 homes constructed, and more than US$6 billion in loans served through his Grameen Bank. He could have headed for the international lecture circuit with 30 years of stories and a nickname like the Sage of Dakka. Or he simply could have looked at the global movement that had grown up around microfinance and felt justified in taking retirement. Instead, Yunus continues to pursue his audacious vision to fight poverty through market solutions. He has not relented on his tireless work to realize new ways that capital markets can more humanely serve the poor. The thesis of this book relates to social businesses- a venture which limits personal financial gain to pursue specific social goals.
Writers on Yunus have commented that his brilliance is his understanding of the mechanics of markets. He has used the momentum of success to subvert the “theology of capitalism.” According to Yunus, businesses do not all have to be singularly profit-minded. There is room in the market for something other than what he coins a “Profit Making Business (PMB).” He calls for the growth of social businesses dedicated to solving social and environmental challenges but maintaining the structure of PMBs. He writes, “like other businesses, [a social business] employs workers, creates goods or services, and provides these to customers for a price consistent with its objectives.” The book begins with Yunus at lunch with Franck Riboud, the CEO of Danone in France. There, Yunus and Riboud agreed over a handshake to create a multinational social business. They agreed to sell Danone products affordably to the poor in Bangladeshi villages without any profit paid to investors. Profits would remain in the business to expand its reach to poor villagers or improve its product offerings. The overarching goal of this new endeavor was to improve the nutrition of poor families with the help of a successful market player. In Yunus’ mind, this was the first multinational social business – a partnership between Grameen Bank and Danone. Discerning readers might be left wondering about the conversations that took place after the big handshake moment. How did Danone justify reduced profits to its shareholders? Would this venture be left to soft marketers with public relations as their goal or would it be treated like any other Danone business unit? What key performance indicators (KPIs) would they establish? How clear were their shared measures of success? What would “serving the poor better through reinvested dividends” look like? How might this intersect with debates in social capital markets about triple bottom line reporting structures?
Some of these questions are addressed, others remain unanswered. Nonetheless, the agreement between Yunus and Riboud raised the bar on the possibilities for corporate partnerships with social purpose.
The Epilogue to Creating a World Without Poverty contains the Nobel Prize Lecture Yunus delivered in Oslo, Norway on 10 December 2006. It is entitled “Poverty is a Threat to Peace.” In it, he lays out a view that peace is threatened by an unjust economic, social, and political order. He closes with a metaphor that sustains him on his indefatigable quest to eradicate poverty: “Grameen has given me an unshakeable faith in the creativity of human beings. This has led me to believe that human beings are not born to suffer the misery of hunger and poverty. To me poor people are like bonsai trees. When you plant the best seed of the tallest tree in a flowerpot, you get a replica of the tallest tree, only inches tall. There is nothing wrong with the seed you have planted; it is only the soil-base that is too inadequate. Poor people are bonsai people. There is nothing wrong in their seeds. Simply, society never gave them the base to grow on. All it needs to get poor people out of poverty is for us to create an enabling environment for them. Once the poor can unleash their energy and creativity, poverty will disappear very quickly…”
You can quibble with this man’s vision for the future, but you have to respect the progress he has made thus far.
To order the book: www.grameenfoundation.org/yunus_book/