The current financial crisis makes it very clear that our current financial system is not sustainable. This is the opportune time to re-imagine and re-design it using a new set of objectives.
The global financial crisis has demonstrated serious shortcomings with our banking system. It has converted the marketplace into a casino. It's no longer business; it's outright gambling, excessive greed and irresponsible capitalism. It has encouraged irresponsible behaviour among individuals who influence the marketplace. This is where social business comes in. Social business offers ethical guidelines: non-dividend companies that address social goals -- taking care of the basic deficiency of present day version of capitalism.
Credit markets were originally created to serve human needs; to provide businesses and individuals with capital to start or expand businesses or fulfill other financial needs. In recent years, however, the credit market has been distorted by a handful of people and companies with a different goal in mind -- to earn unreasonable financial returns through clever feats of financial engineering. With the collapse of the housing market in the United States, this house of cards has fallen. Millions of people around the world, who invested in good faith and played no active part in these dealings, are now suffering. As it is most often, the poor are the ones who must bear the most of the harsh consequences.
But the deeper the crisis the bigger the opportunity to correct the mistakes. Present crisis offers us an excellent opportunity to redesign our financial system in a fundamental way. If we miss this opportunity we'll be going the road of repeating the history.
Good economic theory must give the people the chance to use their talents to build their own lives. We must get away from the traditional route where the rich will do the business and the poor will depend on private or public charity. In my experience, poor people are the world's greatest entrepreneurs. Every day, they must innovate in order to survive. They remain poor because they do not have the opportunities to turn their creativity into sustainable income.
This is where the idea of social business comes in; investors supporting social businesses, which have social missions instead that of maximizing profit. I have witnessed it many times that companies investing in social businesses ultimately benefit from social business by making the world a better place. In the short-run they turn out to be more competitive because of positive effects with regard to the motivation of employees and enhancing innovation potential.
What we need is to think strategically about development, analyzing a country's potential role in its region and the world in search of opportunities for growth. Platforms like the Global Social Business Summit can facilitate the process on bringing about change. They offer space to establish connections across industry to build a global network for social business and social investment. I have been promoting and establishing social businesses for many years now to fight poverty and other social problems. I see enormous interest being generated throughout the world on this new way of doing business. Let us move forward to make this change and let us create the world we dream of. It is in our capacity to do so.
Prof. Muhammad Yunus is a founding member of The Grameen Creative Lab, which is organizing the Global Social Business Summit.
Save the Date: We invite you to mark your calendar for the Global Social Business Summit 2012, which will be held from 08-10 November 2012 in Vienna, Austria. For more information please visit www.gsbs2012.com
1) An Open Letter to Nobel Laureates and Government Officials regarding discovery of Economic Colander phenomenon first time identified and recognized by Muhammad Safder Ali - [Please download the file so that you can read it in bigger fonts] - http://www.chicagoinnovationawards.com/wp-content/uploads/2012/07/applicant_docs-An-Investigation-and-Analysis-of-Retail-Theft-and-Economic-Losses.pdf
2) SWISS Parliament - STATEMENT OF FACT AND DECLARATION OF ABUSE TO WHITE HOUSE ABOUT AN INNOVATOR AND INVENTOR UNDER ATTACK - GOOGLE SEARCH - Muhammad Safder Ali inventor under attack [Please find details at the bottom of the page] -http://www.facebook.com/media/set/?set=a.10150504636151468.438228.345958796467&type=3
3) An Innovator and Independent Inventor under attack -http://reducingbarriers.ideascale.com/a/dtd/An-Innovator-and-Independent-Inventor-under-Attack/241591-10332
That was Government, not big business,home loans. IF YOU WANT REAL SOCIAL BUSINESS---GET THE GOVERNMENT THE HELL OUT OF THE WAY.
It makes me wonder if the author lives on this planet or was he hibernating the last few years or he
does not know that there is a wider world out there .
Mr Yusuf is talking about a global crisis where weather you and your "Good Old Profiteer" friends like it or not has been created by big greedy corporations remember BIG BUSINESS THAT WAS BAILED OUT BY BIG government. It was not the government that pushed people to get a mortgage it was greedy and unscrupulous mortgage companies through a lack of oversight ,deceit and transparency.
Mr Yusuf knows how to create jobs ( he created an incredible of start up companies)and he does not send them to China like your super zero ' MEET THE WRONG ME".
get over it., be a man or woman ,give president Obama CREDIT FOR WHAT HE ACCOMPLISHED even if you do not like his skin color or his political affiliation. He got us out this abyss where the previous administration THREW US IN.( YOU ARE TOO YOUNG TO REMEMBER)
Do you know the difference between hardcore conservative republicans and the hardcore communists who blindly and without conditions follow the directions of the central party?
A: The republicans have more money
He called it The Second Income Plan. See Second Incomes at www.aesopinstitute.org for a recent version.
This plan might be adopted in other countries. It would change the economic landscape and help to end poverty.
Or, social purposes rarely ever work in a Business Environment.
Only Profit carries the Overhead.
Here are the new rules:
1. The only way to get what you want&need is by meeting the needs of others. No taking from others by force, ever.
2. Scarce resources are allocated based on what people truly value, not just what they say they value. People are rewarded for finding innovative ways to make more with less. Less waste, energy or scarce resources.
3. Cooperation rules/ ideas compete: entire system needs to focus on people working together freely regardless of location or political boundary.
On the otherhand ideas need to compete. Innovations in products, new ways of doing things&organizing people need to be tested. Ideas that prove themselves better at using scarce resources to meet human needs rewarded and copied , while those that do not abandoned. Politicians cannot be allowed to shift the rules to protect the politically powerful masters of old ideas.
If we accept the challenge and adopt this new system global inequality will shrink and true wealth spread. The poor will finally leave behind lives of subsistence. People will have the resources to protect precious wild lands and oceans.
Continued...
I like to call this economic system "Bourgeois Dignity" after one of my favorite economists D. McCloskey. Another potential name wold be human focused innovation. Though many know it by its common name:
Global Free Market Capitalism
Before there was the business of business, there was the business of existence. Business cannot be conducted without creatures to conduct it. We’ve built an illusion, and then mutated into a form specifically designed to inhabit that deceit.
“to start or expand businesses or fulfill other financial needs.”
The flight from these financial aberrations suggests the system is self correcting. A system that didn’t would be doomed.
“financial engineering.”
Fraud by any other name would smell as rank. The only way it could endure was to bend law to its will.
“If we miss this opportunity we'll be going the road of”
foregoing a small dose of remedial hopey changey, for a large spoonful of nasty tasting American Springy?
“Good economic theory”
needs a firm foundation in reality. To anchor it, against the worst excesses of outrageous human rendition.
“poor people are the world's”
majority. If it is to be survival of the fittest, and eradication of the rest. Then what is to prevent the many overwhelming the few?
“social business”
When power is withdrawn from the people, why not construct a parallel system?
“establishing social businesses for”
those who need a helping hand. Conjoined with those, who consider the extension of helping hands a given.
Consider this. If politician "x" passes a law that costs every American $1 but gives the resulting $300 million to a small special interest group of 100 people. How much time and effort can a tax payer spend opposing a $1 tax? Not even 5 min. How about the 100 person special interest group. $$$millions. And if the benefit lasts for multiple years, then hundreds of millions.
This is called diffuse costs and concentrated benefits in political economics. It is just one of the reasons the politics and government should be the last solution tried when all others fail.
Great article: http://www.nomiprins.com/thoughts/ "Before the Election was Over, Wall Street Won"
This is a wonderful sounding idea that has lead so many down dead ends.
Originally the for humans the world was divided between extended family and enemies to be killed on sight. The problem is that the number of people that you can know well enough to exchange with through reciprocity has a natural limit. I can remember that a friend fed me last week so i should repay him today.
Then humans discovered trade (exchange of two dissimilar goods at the same time). No other species does this. It takes abstract thinking to compare the value of the two different objects and give up one valuable thing for something I value even more.
Over time this new skill spread and allowed humans to see value in former enemies. These socially distant but mutually beneficial relationships have allowed the world to prosper. They have also encouraged a historically unique drop in violence that few appreciate. Every time political power is used to distort this free exchange people start down dark roads that haunt our past and threaten our future, nationalism, tribalism and the strong taking from the weak.
into countries and invade them, if they have oil.. if they have resources we need.. We have the
largest military machine in the world.. The Capitalist want a even bigger machine.. So we can
scare our adversaries into submission... this is why we have a deficit. The Capitalist, will tell
you , no, its the bums who collect welfare, or people who want healthcare. or the people who
can't make a living on minimum wage.. Yes we have challenges ,, and they are to get control
of these Capitalist... Make them understand, that tearing up the planet for profits.. cutting education,
and healthcare, is the wrong path for America. If we continue in the direction the Capitalist
want,, there will be no middle class... just the rich and the poor,, who serves there masters..
want,, there will be no middle class... just the rich and the poor,, who serves there masters.."
In other words, we will become all the things the founding fathers were trying to escape.
scare our adversaries into submission... "
You are confusing capitalists with politicians. They are not the same. Far too many Republicans preach free trade but support policies of Mercantilism or colonialism. But then again so do most Democrats.
Simple put we need less political control, less military spending, more open borders to goods an people. Once mercantilist can no longer use political to gain power they will be forced to compete for your dollars by providing better goods and services if they want to maintain their wealth.
Slightly modified: In recent years, however, the credit market has been distorted by GOVERNMENT, HELPING a handful of people and companies... to earn unreasonable financial returns through clever feats of financial engineering.
It's not even capitalism, it's "creditism." In real capitalism, the creation of new credit is NOT unlimited and risk-free... money is backed by a commodity and credit is backed by productivity (real goods and services), so borrowing is more limited and those entities that abuse credit simply FAIL.
Under a global fiat-dollar system, with floating exchange rates, and fractional-reserve banking, and Fed-manipulated interest rates, and TBTF institutions, and infiltration of every aspect of government with former financial-sector employees, and unlimited credit expansion that has no relation to real goods and services... OF COURSE it's a rigged casino. How could we even think to call such a system "capitalism"?