The Two Most Productive Hours I Have Ever Spent: Learning from Muhammad Yunus

Today was eye-opening to say the least. Muhammad Yunus is in Paris for the French release of his book entitled, Creating a World Without Poverty: Social Business and the Future of Capitalism...and spending two hours listening and exchanging with this visionary human being gives me more hope than anything or anyone has...in my entire life.

I listened as he finished an interview with a major French magazine...and heard the interviewer ask about the current instability in the world of finance and banking, sub-prime etc...he challenged Yunus to explain how the idea of microcredit could work in the "developed" economies in which rents and real estate cost more...and people would need to borrow many times the amounts microcredit deals with in much of the world.

As I heard Yunus calmly "ohh" and "ahh" as the interviewer spoke...I waited for the response I knew would come. Prof. Yunus replied, matter-of-factly, "But it is the system that is wrong...these banks...they can 'write off' billions in a matter of days yet they cannot loan money to people? Of course they can!"

And he went on to describe how not only is it possible that the system shift, evolve, "change...but that now more than ever people were waking up....including and perhaps especially the bankers and those closest to the financial world, were realizing that it could only ever change..and that if it did not...we were all in trouble.

The definition of what "profit" is and how "capitalism" relates to the human experience...in fact does not allow for nor include all of the human experience. We are not machines created to make profit, says Yunus. We are three-dimensional humans who need much more than financial profits to survive and thrive.

From this idea springs the shift towards the Social Business model which invites all of us to participate in business in a more human way, will the totality of who we are, working towards goals which are more inclusive of all aspects of what it means to be "us."

This is the true and deep future of globalization...a true interconnectedness which means redefining what capitalism does, and how it serves us, the humans who utilize it to create, produce, distribute and enjoy both the wealth, and the products of that same wealth. For what is abundance and "profit" if not the ability to satisfy and meet one's needs and those of our loved ones...and reach out to our fellow humans, and allow them the opportunity to do the same?

Utopia? Perhaps? But why the hell not!?

Follow Vivian Norris de Montaigu on Twitter: www.twitter.com/vivigive

Comments

[ndem]

03:01 PM on 04/01/2008

Regarding the last comment...Prof Yunus (not Eunice!) is from Bangladesh (NOT Pakistan) and he was NOT a banker but a professor...so banking experience is actually OUT. He actually says that whatever the banks do, they do the opposite...the banks loan to those who are ricj or with collateral...Grameen and Yunus do the opposite...also credit cards are for cinsumer loans not the kind sof loans Yunus loans for which are linked to being able to create tiny microbusinesses which are connected to concrete realities which allow for a small profit so the loans can be paid back...microloans for the US poor via credit cards makes the situation worse...thus the last commentator does not understand what Yunus and Grameen are doing.

[Henry]

05:53 PM on 04/01/2008

My apology for misspelling the name, no ill was meant. And you'd do yourself well to google micro lending. The rates are exorbitant. Indeed, if in keeping with Muslim standards, there is more properly a share of revenues from the proceeds than interest. I do understand that credit cards are consumption loans. But if you are purchasing yarn or wool to add value on a labor based production, there would be no practical distinction. Poor in America are not agrarian if you bother to look. They are homeless. They are mildly mentally retarded. Then they are uneducated. They do not operate in family based neighborhood coop type productions.
Wasn't Bangladesh previously know as East Pakistan?
Let me point this out to you: MicroCredit will not work in American for precisely the same reason that Starbucks will not work in Bangladesh.

[jeff.mowatt]

04:02 AM on 04/02/2008

Indeed. It must be said that there are also many banks using the term microcredit for loans which are only available to existing business or worse still plain loansharking. Otherwise, the relatively high cost of microcredit is in the education, with the moral collateral model requiring much engagement. I mentioned Tomsk below, this was very much an urban area and microcredit enabled 10,000 microbusinesses to be created from a population of one million. 10 million dollars loaned and repaid.

Other kinds of microcredit exist, asset based funding for instance, a model advocated by former City of London regulator Chris Cook, known as Open Capital which is compliant with Shariah Law on usury. With this approach it's feasible to create affordable housing under a community land partnership by investing with the poor for ethical returns.

Conventional banks don't lend money to poor people, many so-called microcredit banks don't even do it.

Social business returns much more to the community, over and above the effect of trickle down economic development which never reaches the poorest. it co-exists, is not a communist threat and empowers those that might otherwise fill the ranks of the under-class who resent being disenfranchised while being told that all are equal.

[Henry]

01:15 PM on 04/01/2008

There is no sense of "utopia" involved here. It is one of practical reality. There is no shortage of credit in America. Most banks, indeed, have a limit in size of loan, i.e. "no loans less than $1,000" due to the cost of boarding and administration. In America Micro Credit really happens at the credit card level. You must, however, qualify for the credit card. If you cannot avail yourself of this "available" credit you are deemed a risk ( like the "untouchables" of India) that is not creditworthy. This is your available "population" for Micro Credit in America.
You, Viv, should get yourself a job in a bank and learn from some experience. Look, Eunis has a population in Pakistan that is not served by the banks. This was also true in post iron curtain regimes. But to delude yourself, even in the abstract, that this ameliorates the ugliness of the commercial banks and their uncles the investment banks is naivete.

[jeff.mowatt]

12:52 PM on 03/31/2008

Well I do know that when microcredit was taken to the 'developed' economy of Russia in the Tomsk initiative back in 2000, not only did it achieve the same expected performance but also women micro-entrepreneurs exceeded their male counterparts by a factor of 4:1

Those with an interest in the subject might like to participate in yunus_discussion on Google groups or subscribe to the Social Business group on Linkedin.

[Rockyman]

12:37 PM on 03/31/2008

It would be nice--and may shortly become essential--to rethink the limits of capitalism. It distills human interaction to arrive at a selfish outcome. We need to realize that the corporate obligation to enrich shareholders--fuduciary responsibility-- often is so narrow in focus as to be blinded by profits at the expense of broader negative impacts. The 'greater good' is just altruistic and not beneficial to the bottom-line. We will see shortly the ability of Americans to "reach out to our fellow humans". It is a habit not exercised much recently but will be demanded of us shortly if we are to weather the coming fiscal storm!

[jeff.mowatt]

01:20 PM on 03/31/2008

Agreed. Tell us what you think of this Rocky, It's one American's view of 'substituting greed with compassion' in a paradigm for the Information Age.

In sort, making people the central focus of business:

http://www.p-ced.com/History/tabid/57/Default.aspx

[Rockyman]

12:24 AM on 04/01/2008

I like the 'outside the box' thinking of the "people-centered" approach to business. Thanks for that thread! Many Dems recently have embraced the "law of the jungle" that the right-wing is known for. They have been running from the "liberal" monicker as if to have compassion for the plight of others and offer assistance will damage poll-numbers and seem too 'maternal'. Well, maybe we have enough wealth to spread a little around--from the obscenely wealthy to those much less fortunate. We shall soon see how selfish those elites behave in the face of the coming fiscal readjustments taking place worldwide. Can you imagine how much better life would be for the American masses if the trillion or two spent in Iraq would have been spent in a constructive manner and not for death, destruction and displacement!

[UltraClassic]

12:26 PM on 03/31/2008

Hillary '08

Wow!

A quick re-read of "Animal Farm" will cure you, I'm sure of it.

Hillary '08