Book Review: Creating a World Without Poverty
Identifying the Book
In the last 20 years, free markets have increased globally, bringing with them amplified opportunity for optimistic growth. However, traditional capitalism is not in a position to address issues such as poverty and inequality, because it is hindered by the narrow perspective of human nature in which individuals are one-dimensional beings whose interest is profit-making (Yunus 2008). As indicated by research, human beings are compelled by other passions and drives, including altruistic, social and spiritual ones. This paper comprises a review of a book that welcomes the reader to the social business world, where the entrepreneur’s innovative vision is used in the context of the most serious issues such as housing the homeless, protecting the planet, feeding the poor and healing the sick. It is the principal message in Muhammad Yunus’ book, titled Creating a World Without Poverty: Social Business and the Future of Capitalism, published by Public Affairs Publishers in New York in 2008.
Identifying the Author
Muhammad Yunus was born on 28 June 1940 in Bangladesh. He was a third child of nine in a family. In his early school years, he was active and joined Boy Scout. In college he showed interest in cultural activities. Yunus is a Nobel Peace Prize recipient, economist and banker (Yunus 2008). As a professor of economics, he developed the notions of microfinance and microcredit. These are loans given for poor entrepreneurs, who are not eligible for traditional banks loans. Yunus has been awarded with a number of international and national honors. For example, in 2010 he received the United States Congressional Gold Medal.
He became Glasgow Caledonian University’s Chancellor in 2012. Besides, he is an advisory board member at Shahjalal University of Science and Technology. Before then, Yunus was a professor of economics at the University of Chittagong in Bangladesh. He is one of the founding board members of Grameen America and Grameen Foundation, which enhances microcredit. He is also a board member of the United Nations Foundation. Yunus has published many books to his finance work. The Government of Bangladesh fired him from his position at the Grameen Bank, claiming that he is too old for the position. According to the bank and Yunus, this is a decision that was politically influenced.
Yunus delineates his vision for a novel business model that integrates the authority of free markets with the expedition for a humane world (2008). In his book Creating a World Without Poverty: Social Business and the Future of Capitalism, Yunus tells the inspiring tales of firms that are practicing the new business model today.
As an undergraduate business student, I found Yunus’s argument about social businesses remarkable. According to him, social business employs business models that are driven by profits. This implies that such businesses should meet real market requirements and make profits. The profits generated are turned back into creating more value or into the social objective being addressed, a factor that results in improved growth and business expansion. In my view, becoming a social business is one way to ensure the future value creation, in addition to achieving the objective of serving people and the community at large.
Summary of the Book
The book, Creating a World Without Poverty: Social Business and the Future of Capitalism is subdivided into three parts:
- The Promise of Social Business
- The Grameen Experiment
- A World without Poverty.
The book details the persuasive, personal image of its author, Dr. Yunus. He has developed a notion called social business whose aim is to ensure that the poor own self sustaining businesses that are of help to them (Smith 2008).
A social business can be defined as a business that does not pay dividends, sells its products at affordable prices and uses its profits to expand into new members, services and products to extend the business services to the deprived. Social businesses are aimed at involving the poor directly so that they can improve their living standards and communities.
To begin with, Yunus elucidates why world poverty sources of funds such as the International Monetary Fund and the World Bank have a restrained capability to assist the poor (Smith 2008). He then proposes on how these traditional sources of funds can be improved and explicates why some of economic models do not reach the poor.
While the corporate social responsibility movement is concerned with profits, individuals and the planet are seen to learn more, since in the long run profit emerges as the fundamental focus. According to Yunus, a company dedicates a penny to corporate social responsibility and then uses up to 99 cents to destroy the same society. Further, he deliberates on the faults of socially engaged profit capitalizing businesses, cooperative businesses, charities and non-profits.
He then explicates the manner in which the Grameen Bank was started and the many social businesses it spawned. The bank gives loans for the poor at affordable costs (15 US dollars) and without security. The Grameen Bank boosts a movement that made families become self-sufficient while providing it to the society (Ketcham 2012). As a result of these loans, more than 650,000 houses have been constructed, a move that would have otherwise not been achieved by regular banks.
In the rest of the book, the author gives a clear definition of social business. According to him, capitalism is a half-formed and unsophisticated notion requiring the multi-dimensional aim achieved by social businesses (Ketcham 2012). He claims that, the reason people do not achieve something is because they have not put their minds to it.
The concept of social businesses is kept growing by creativity and necessity. It all started with small loans for women, and then came loans for houses, a micro-factory to produce yoghurt for the deprived and health care services. The micro factory initiative was a hybrid attempt with Danone, and it is a good example of how business aimed at profit making can commit part of their resources to a social dealing.
Critical Book Review
The book is formatted in a practitioner-friendly manner. It is clear and straightforward making it easily understandable by the intended audience. The book offers an exceptional source of novel knowledge for individuals in the business industry. It offers a coherent narrative, whilst the author’s arguments are supported by good evidence. For instance, the aspect of social business is a result of Yunus’s perception that resulted to Grameen phone project, the Bangladesh’s biggest phone service provider currently, Grameen Danone, as well as the Eye Care Hospitals (Yunus 2008). Social business employs business models that are driven by profits according to Yunus. This implies that such businesses should meet real market requirements and make profits. The profits generated are turned back into creating more value or into the social objective being addressed, a factor that results in improved growth and business expansion. For this to be achieved, Yunus has used a model that ensures that the initial business investors obtain just an amount equivalent to their original investment.
According to Yunus, the capitalist system lacks social business (Yunus 2008). In order to empower the system, social business should be introduced. This, in turn, would assist the capitalist system in addressing the devastating international issues that are not dealt with. Social business and non-profits differ in the sharing of profits by the shareholders. The latter depends on humanitarian capital for stability and growth. As declared by Yunus, it is true that the social business model is more powerful than the traditional non-profit model (charity dollar), which can be termed as unsustainable. This is based on the fact that while the traditional non-profit model can only be employed once, the social business model salvages itself over and over to benefit a growing number of individuals.
The author puts forth that a profit maximizing company has the capacity of serving a social objective (Yunus 2008). This affirmation can be criticized based on the fact that such companies are indebted primarily to the shareholders, and their aim is to maximize the return on investment (Ketcham 2012). As a result, conflicts may emerge with reference to this. A profit maximizing company can only achieve a social purpose, when the shareholders are openly told regarding such an objective. For instance, they can be told that investors would only receive a specific amount of profit and the remainder would be reinvested back for value creation in future. Shareholders may demand maximum value creation from the business. However, it is paramount to ensure that values do not clash with value. Yunus deems that poverty can be eliminated from the globe owing to the fact that it is artificially inflicted to human beings. Though this is true, it is obvious that poverty can only be reduced by eliminating it and “putting it in the museums” as Yunus says is near to impossible.
Delineating the “entrepreneur” in a wider perspective can assist in modifying the nature of capitalism completely in addition to solving most of the unsolved economic and social issues in the scale of free market (Smith 2008). Supposing the entrepreneur has various motivation sources, including profit maximization and serving people together with the entire globe, therefore capitalist systems can serve as social businesses. The sources should be equally exclusive and convincing.
Reading the book, it is observed that the author has presented standards of how businesses need to operate as social businesses. Yunus has offered sufficient examples which make the book clear to understand. The book, Creating a World Without Poverty: Social Business and the Future of Capitalism, is timely and properly written for certain audiences by Muhammad Yunus. It is an insightful and helpful volume that is presented with thought and rigor. The book is highly recommended to businesses that wish to enhance growth, expand and maximize future value creation. Specifically, it is recommended for profit maximizing companies that are established entirely for profits. Through this book, they can gain insight on the various sources of motivating their shareholders, thus attaining their goal of becoming social businesses.
Comparing this text to other case studies in CIM, for example Marketing and the Triple Bottom Line, it is apparent that while businesses are aware of their need to devote to sustainable business practices, very few have a rational strategy to the same. Many business people think that their focus should be the business world, leaving others to safeguard the planet. From Yunus’ book, companies need to incorporate the Triple Bottom Line principles of social, economic and environmental as a realistic practice to become sustainable.
|Comparative Book Review Althusser vs. Fromm||Book Review Banker to the Poor by Muhammad Yunus|
- Book Review Banker to the Poor by Muhammad Yunus
- Read Kanner’s Pocketbook Power
- Comparative Book Review Althusser vs. Fromm
- Nature and Culture: American Landscape and Painting, 1825-1875 by Barbara Novak