"The price of freedom is to be true to yourself"
Recognize that how we think is so much more important than what we think.
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About Self Employment and Social Entrepreneurs By Muhammad Yunus, Grameen Bank Most important step to end poverty is to create employment and income opportunity for the poor. But orthodox economics recognised only wage-employment. It has no room for self-employment. But self-employment is the quickest and easiest way to create employment for the poor. I have been arguing that credit should be accepted as a human right, because it is so important for a person who is looking for an income. Credit can create self-employment instantaneously. Why wait for others to create a job for you when a person can create his/her own job. And this is so much more convenient for women who would prefer to work out of their homes. We are so much influenced by orthodox economics that we forget that our forefathers did not wait for someone else to create jobs for them. They just went ahead in a routine manner to create their own jobs and income. They were lucky. They did not have to learn economic theories and end up with a mindset that the only way they can make a living is to find a job in the job market. If you don't get a job, march on the street ! In the Third World countries, even if you march on the street there is no job for you. As a result the poor go out and create their own jobs. Since economics text-books do not recognise them, there is no supportive institution and policies to help them. That's why money lending business thrives. Moneylenders' business is as old as money itself. We read about the cruelty of moneylenders in our religious books, we condemn them as a part of our religious duty. We read the great classics about making payment with a "pound of flesh" and get horrified by it, but we had done nothing significant about it in addressing that problem until Grameencredit came around. While we keep hearing about the spread of microcredit around the world, about its 98 per cent repayment record, about poor people getting out of poverty with microcredit loans, about women empowerment, all this has no impact whatsoever on conventional banking. These banks continue to practise the same old banking as they have been doing from the very start of their business, as if nothing new happened in the world ! Probably they still shield themselves by arguing that the poor are not creditworthy. It is a very strange world ! A big step towards eliminating poverty is to make sure that we offer financial services even to the poorest person, that no one is rejected by a bank on the ground that he/she is a poor person. Each Person Is a Potential Entrepreneur In some important ways our designing of the theoretical framework of economics or its misrepresentation of it is responsible for perpetuating poverty. Its conceptualisation of individual human being as "labour" took the rest of the theory on a completely a wrong track. Role assigned to human beings in economic theory is certainly not something a self-respecting person can celebrate. Economic theory in its simplification visualises people as providers of labour. They are born to take orders from a small group of very special kind of people known as 'entrepreneurs'. These special people are the only people who can think, organise, and act. All other people simply fill in the work slots created by the thinking and driving people. Level of well-being of the working people depends on the level of their wages. After creating a world overwhelmingly populated by uninteresting working people, economic theory gets busy with the interesting people, the entrepreneurs, because they are the movers and shakers of the economy. Taking the cue from the theory, powerful institutions are built, rebuilt, improved, support systems created, detailed legal systems developed, policies formulated, guidelines created, research undertaken all to ensure that the movers and shakers of the economy find it convenient to go in the direction they wish to go, and are able to utilize every last bit of their talent without any hindrance. Try to imagine how the economists would have built their theory if they had started out with an axiom that all men and women are created equal, that each of them is endowed with unlimited creativity, and each of them is a potential entrepreneur. I am sure you'll agree with me, with this as a starting point, they would have built a very different economic theory, and we would have created a very different, and definitely much better, world as a result. It will be an uphill task to end poverty in the world unless we create new economic thinking and get rid of the biases in our concepts, institutions, policies, and above all, our mindsets created by the existing orthodoxy. Unless we change our mindsets, we cannot change our world. Missed a Great Opportunity Economic theory took the second, and most damaging wrong turn when it came to explaining the driving force behind the competition among the entrepreneurs. It recognises profit-motive as the only motive behind this. Maximization of profit is the battle-cry. This explanation occupies such a central position in economic theory, and everything else has been built in such intricate details around it, that nobody dares to raise any question about it. Accepting this as the ultimate truth about capitalism, people who are not interested in making money stayed away from business and market in a capitalist world. For the same reason, people who enjoy making money headed straight for the market. So the market became an exclusive club of the fortune-seeker only. What a shame for missing a great opportunity ! Economic theory missed the most thrilling opportunity to change the fate of the world by completely ignoring the number and power of the people who are more interested in social gains than personal financial gains, and those passionately interested in making the world a better place to live in, rather than remain narrowly focused on their own personal benefits. By restricting the driving force of the market to narrow self-interest, economics also missed the greatest opportunity to become a truly social science and escape from being a cut and dry dollar-and-cent science. Nobody doubts that an entrepreneur can set up a pharmaceutical company to make a big profit for himself or herself. But it can be equally plausible that a person sets up a pharmaceutical company to bring quality medicine at the lowest price possible so that even the poorest family can afford it. If economics could envisage two types of entrepreneurs, personal-gain driven and social-objective-driven, it would not only be more realistic, but it would have helped the world solve many of the problems that profit-driven market doesn't solve today. Behaviour Pattern of a Social Entrepreneur The behaviour pattern of a social-objective-driven entrepreneur, i.e. a social entrepreneur is as follows :
Social-objective driven investors will need a separate (social) stock market, separate rating agencies, separate financial institutions, social mutual funds, and social venture capitals, etc. Almost everything that we have for profit-driven enterprises will be needed for social-objective-driven enterprises, such as, audit firms, due diligence and impact assessment methodologies, regulatory framework, standardization, etc., only in a different context, and with different methodologies. Because of the way orthodoxy of economics has given shape to the existing world, all the investment money now is locked up in only one category of investment: investment for making personal profit. This has happened because people have not been offered any choice. There is only one type of competition: competition to amass more personal wealth. The moment we open the door for making social impact through investments, investors will start putting their investment dollars through this door too. Initially some investors will divert a part, may be a small part, of their investment money to social enterprises, but if social entrepreneurs show concrete impact, this flow will become larger and larger. Soon new type of investors will be appearing on the scene who will put all or almost all their investment money into the social investments. Some of the existing profit-driven entrepreneurs may start revealing another dimension of their entrepreneurial ability. They may successfully operate in both the worlds, as conventional profit-seekers in one, as dedicated social entrepreneurs in another. If the social enterprises can demonstrate high impact and creative enterprise designs, a day may come when personal-profit driven enterprises will find themselves hard-pressed to protect their market share. They'll be forced to imitate the language and style of social enterprises to stay in business. I don't think I need to work hard to convince anyone that there are millions of investors right now who would gladly put their money into a social enterprise if they can be assured that their investment will at least retain its original value, while making a significant impact on the lives of the poor people, deprived people, or any group of disadvantaged people. I receive many letters from people around the world asking me if they can invest in Grameen Bank. Obviously none of them are looking for an opportunity to make money by investing in Grameen Bank. Why has our business world failed to offer opportunities to people who want to invest for the benefit of the people? If socially motivated people can dedicate their lives in politics to bring changes in their communities, nations, and to the world, I see no reason why some socially-motivated people will not dedicate their lives in building and operating social-objective-driven enterprises. So far they have not done so because neither the opportunity nor the supportive framework exists. We must change this situation. A completely new world can be created by making space for the social entrepreneurs and the social investors in the business world. This is a very important agenda for all of us. Eliminating poverty will become so much easier if social entrepreneurs can take up the challenge of ending poverty, and social investors can put their investment money to support the work of the social entrepreneurs. |