Can growing wealth concentration — which has become a global threat to peace — be halted?
This was the question posed by Muhammad Yunus, Bangladesh’s Nobel Peace Prize-winning pioneer of microcredit and microfinance, at 25th-anniversary celebrations for the Daily Star newspaper in Dhaka recently. Not content with merely raising such a crucial query, Yunus ventured an answer for the audience of several thousand.
Oxfam, he noted, had just delivered a horrifying update on wealth concentration. “This year they tell us that the 62 richest people own more wealth than the bottom half of the global population. They also predict that in 2016, the richest 1 percent will own more wealth than the rest of the world combined.”
The usual reaction to such a big issue would be to pressure governments to do something about the widening gap between rich and poor. But Yunus’s idea to reverse wealth concentration isn’t to prod governments into more effective action. Instead, he believes the only way to achieve that goal is through forging “citizen power” that transforms the wealth pyramid into a “wealth diamond”.
The key to that power, he told me, is to “redesign the economic framework” by moving from a model based on personal interest to one focused on both personal and collective interests.
“Social business” lies at the heart of that proposed solution.
Using the example of his personal journey in microcredit — “Everything a conventional bank did, we started doing the opposite in Grameen Bank” — Yunus said human problems could be solved “if we design it as a business with the sole mission of solving a problem — with no intention to benefit personally from the business.”
The longstanding belief that the task of problem-solving should be left to governments and charities alone is, to this highly respected social entrepreneur, now outdated. In launching “social business”, all the creative power could be harnessed for one specific purpose — to solve human problems. In this mindset, making money becomes a secondary motivation.
Technology and education have crucial roles to play in combating the horrendous concentration of wealth that threatens no less than global calamity. “The combined power of the youth, technology and social business can become an irresistible force,” he declared.
The least that an education system should do is to prepare young people as entrepreneurs — as job creators, not job seekers.
There is a vast difference between the two: “By training young people as job seekers, we create unemployment since there aren’t enough jobs for everybody. If we prepared them as job creators, there would be no unemployment,” he said.
But can everyone be an entrepreneur? Drawing on his own experience, Yunus believes entrepreneurship comes naturally to human beings. “If illiterate rural women can become entrepreneurs, why should we question the entrepreneurial ability of the educated young? All they need is a supportive financial system,” he insisted.
The way forward for Yunus is to create social-business funds as financial supports — and ask young people to come up with business ideas. The funds would invest in the business projects as share-owning partners, but with one crucial difference: They wouldn’t take profit.
“Once the young entrepreneurs become successful, they buy back the shares without giving the funds any profit. They pay a share-transfer fee, to help the fund cover management and advisory services.”
Social business can thus become a new force to counter what is at present a one-way flow of wealth towards the already wealthy.
Yunus called upon charities and individuals to channel their spirit of selflessness towards social business via aid and donations. Corporations can also invest in social business through their foundations.
“Foundations can invest in regular companies and make money to invest in social businesses. Germany’s Bosch and India’s Tata Trust have set good examples in this regard. Corporations can also invite their shareholders to sign a giving pledge — to allow a certain percentage of their dividends to go into a social business fund as their equity.”
Human greed is a central feature of the current flawed economic framework. This has given rise to symptoms of wealth concentration and global warming — but in social businesses we have a potential cure.
Yunus wants Bangladesh to be the “starting point” of a global wave of such actions.
“We may aim at creating a world of three zeros: zero poverty, zero unemployment and zero net carbon emissions. A world of diamond-shaped wealth distribution — very few at the top, very few at the bottom, with the bulk of people in the middle — instead of a wealth pyramid. A world of equality, harmony, peace and happiness. It can happen only if we citizens take action.”
As he concluded his Daily Star “Silver Jubilee Lecture”, Yunus, at 76, didn’t sound like he was selling his “last dream”. In fact, his pitch was as energetic and passionate as the one that launched his “bank for the poor” — a radical concept that revolutionized economic thinking.
By Suthichai Yoon
Suthichai Yoon is chairman of the Nation Multimedia Group in Thailand. — Ed.
(The Nation/Asia News Network)