Mohammad Yunus, 2006 Nobel Peace Prize laureate, visited the University of Cambridge today to encourage and inspire students with his own experiences and visions, together to work for a better world. Professor Yunus, or “banker to the poor” invented the “microcredit” system in Bangladesh, which operated against conventional logics of commercial banking systems, lending money to the economically deprived to establish their own business.
As a professor in economics, Professor Yunus felt extremely helpless when he first went back from the United States and launched his career as a college teacher. He taught the principles of economics in class, but right outside of the classroom, students struggled in the impoverished environment, barely survived the poverty line. He felt so ironic that the economic theories he taught barely touched the most evident economic problem in his country ––– poverty . He felt desperate to link his teaching with the reality, and tackled the real problem in his country. “There were many birds outside of my office,” Yunus recollected the moment when ideas of making changes first flashed through his mind. “Whenever I looked up in the sky, I felt like I were one of them. When we try to get a birds-eye view on complicated questions, things seem to be easier, and we feel more confident. However, if we always stick to the ground, we may feel we look at things in more detail, but actually it’s just near-sighted.”
At that time, people in Bangladesh needed to borrow money from the banks. However, they could not pass the credit check, and could only borrow very little, if any, amount of money. Their poor economic condition also put them into the vicious cycle of high interest rates, which further exacerbated their economic conditions. Yunus argued with the banks, “How do you know they won’t return the money? How could bank allocate the resources in such an arbitrary way?” He, on the other hand, naïvely thought,”if the banks do not lend money to them, why can’t I do so instead?” He then started to offer financial support to poor people to establish their own business. Surprisingly, almost 100% of money he lent was returned, contrary to what the banking systems predicted. More and more people came for the support, even from villages miles away from his initial institution. It was then he decided to establish a bank, instead of manipulating those money in his own interest. He named his bank –– the village bank (Grameen Bank) –– against most banks in the cities who only pursue profits in regardless of general social welfare.
“People should not go to banks; banks should go to people.” Yunus shared in humble, “just because I know nothing about banking, I could have designed a successful system like this. Whenever I know how commercial banks work, I just do the opposite.” Until now, there are increasing social banks in the world, including capitalist countries like the United State since 2008. These banks are the only banks in the world that do not hire any lawyer, but the rate of money return is undoubtedly the highest. The current credit system most banks use could only ensure that people have the “ability” to return money, but not their “willingness” to do that. More often than not, wealthy but greedy investors are so indulged in the game of arbitrage that they are more likely to go bankrupt. For these social entrepreneur, every dollar they have is used in the most efficient way in terms of creating the value of humanity.
Zero Carbon Emissions
After winning the Nobel Peace Prize in 2006, Yunus did not stop his work in social entrepreneurship. He extended his efforts to another thorny problem — energy. In Bangladesh, the cost of establishing electricity facilities are not affordable for most families. Therefore, they tend to use fire after sunset, or just stop most of their activities, like our ancient ancestors. Yunus wanted to introduce solar power system into Bangladesh, but many people criticised that it was too expensive and cannot be applied to a poor country like Bangladesh.”Why not?”, Yunus doubted.
Social enterprise is not like charity. People still need to pay but in a way that could support the system sustainably. At first, people were reluctant to pay for such a high price to switch to solar system. However, Yunus marketed the system by charging them exactly the same price as their annual cost for the fuel for light, and they don’t need to pay in the following year. This is an incentive compatible approach because it reduced the initial barrier, leading people to a better status both for themselves and for the society.
“If social enterprise is perfect, why doesn’t everyone become a social entrepreneur?” asked Yunus. He attributed many of the social problems he was tackling to the narrow assumption of economics — humans are driven by selfishness. Our social systems are largely built on this assumption and world economy are assessed by economic theories based on it as well. It has long overlooked selfless behaviour of human beings, and thus impeded the formation of social entrepreneurship. He doesn’t think that every company should be social enterprise, but if we recognise there are selfishness and selflessness in human nature, there should be space for two types of companies based on these two seemingly contradicted core values.
Ever since the dawn of human civilisation, the inequality of wealth distribution has been developed. However, it was in recent decades that it grew in an unprecedented way. It is desperate that we pinpoint the factors that lead to the extreme wealth distribution so that we could mitigate or terminate this phenomenon. Social enterprise that help redistribute resources through business models stand out as a possible solution.
Yunus attempted to help children in Bangladesh to access education to reduce illiteracy. Nevertheless, when they graduated from higher education and could not find a job, they complained Yunus for wasting their time in education. Yunus asked them, “Why do we need a job? The idea of job should be abandoned in the last century.” Everyday when you wake up, tell yourself that you are a job creator, not a job seeker. Think like a job creator, and do like a job creator. It releases people from the structure of capitalism, prevents us from working so hard to transfer fortune for those entrepreneur.
“How do I know how to start my own business? I did’t learn it from school,” those young people responded. “Shame on you,” Yunus seriously asserted with his calm voice. “Look at your mother, who doesn’t know a word and who has even never crossed the village, borrowed very little money to start her own business, only to support the family. It is a shame that this didn’t pass down onto you. You make all the education meaningless. Go home. Go to your mother, and start your own business without fear.”
Now, in Bangladesh, Yunus supports more than thousands of young people every month to start their own business. They stop complaining about be “unemployed”. The invention of the idea of unemployment is another mistake of capitalism. Humans are not born to work for other people. Humans are born packed with creativity. This creativity inside of a person is locked up by capitalism, which put everyone into a job. To take a job means you give up other capacities, opportunities and creativities. Capitalism deprives poor person of the economic oxygen: financial service. This is a huge loss of humanity. Once they are given the economic oxygen, just as I did to the poor, they will revive and release their inner ability, making the world a better place.
If we don’t work as social entrepreneur, we become working machinery, passing the money to the tip of the social hierarchy. In the foreseeable future, machine will replace most of the repetitive jobs, but let us abandon the term “unemployment” because only by being released from manufactural processing can human enjoy the real freedom. ♦