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Book recounts Social Business

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By- Nava Thakuria

A review of  “Building Social Business” by Nobel Laureate Professor Muhammad Yunus.

Bangladeshi Nobel Laureate Professor Muhammad Yunus is out of Grameen Bank of Bangladesh today, but he is very much influential in the policy making body of other Grameen sister concerns. And Prof Yunus is now more visible in public lectures, serious discussions and interaction with young generations around the globe.

The visionary banker is now preaching for a different kind of economic enterprise that emphasizes on social development and not the profit for the investors. Prof Yunus terms it as Social Business, a form of business that seeks to solve social problems. And his latest book ‘Building Social Business’ describes all about ‘the new kind of capitalism that serves humanity’s most pressing needs’. Published by the University Press Limited, Dhaka the gorgeous book (written by Prof Yunus with Karl Weber) with over 250 pages priced at Taka 395 (1 USD =60 Bangladeshi Taka). First published in USA by Public Affairs, the Bangladeshi edition of the book was published in June 2010 with its second impression in August 2010.

The book analyses about a new kind of capitalism and enterprise based on the selflessness of people which Prof Yunus calls social business. It’s a kind of business dedicated to solving social, economic and environmental problems that have long plagued humankind- hunger, homelessness, disease, pollution, ignorance, argues Prof Yunus. Actually the social business is a new category of cause-driven business. In a social business, the investors/owners can gradually recoup the money invested, but cannot take any dividend (profit) beyond that point. Purpose of the investment is purely to achieve one or more social objectives through the operation of the company, and no personal gain is desired by the investors. The company must cover all costs and make profit, at the same time achieve the social objective, such as, healthcare for the poor, housing for the poor, financial services for the poor, nutrition for malnourished children, providing safe drinking water, introducing renewable energy etc in a business way, elaborated Prof Yunus.

There may be two types of social business. The first one focuses on businesses dealing with social objectives only with no-loss, no-dividend structure. The second one takes up any profitable business so long as it is owned by the poor and the disadvantaged, who can gain through receiving direct dividends or by some indirect benefits. There are various ways how the ownership can go to the poor. Occasionally both of them may be mixed where a socially beneficial rural infrastructure can be erected whose ownership will later go to the poor. “It brings a new dimension to the business world, and a new feeling of social awareness among the business community. But I am not opposed to making profit. Even social businesses are allowed to make profit with the condition that profit stays with the company; the owners will not take profit beyond the amount equivalent to investment,” explained Prof Yunus.

The man, who has shown the way of a dignified life for millions of Bangladeshi poor women through micro-finance, argues that the present concept of entrepreneurship is one-dimensional—to maximize profits. By defining entrepreneur in a broader way, one can change the character of capitalism radically and solve many of the unresolved social and economic problems within the scope of the free market.

“Let us suppose an entrepreneur, instead of having a single source of motivation (only increasing profit), now has two sources of motivation, which are mutually exclusive, but equally compelling—maximization of profit and doing good to people and the world,” Prof Yunus explained.

He at the same time pointed out, if profit and greed are the sole driving force in modern society then why we should have churches, mosques, temples, schools, art museums, public parks or community healthcare centers and why would there be any charities, foundations, non-profit organizations? Fortunately for us there is a keen desire among many to lend a hand through charity, for addressing the problems of poverty and other social problems. Charity is rooted in basic human concern for other humans. These days concern is usually expressed in the shape of non-profits and NGOs which may take various names and forms. Then there are aid organizations sponsored by rich governments: bilateral and multilateral. Of course, he believes that charity is essential in some cases when the people have to depend on charity, because it is virtually impossible for them to support themselves. “I am thinking of people who suffer from extreme physical or mental disabilities, as well as the very old and the very young. As a society, we simply owe these people our help, and it would be cruel to insist that they should support themselves. So there is room in our world for charity, just as there is room for social business,” Prof Yunus analyzed in the book.

However, he has some reservation on charity and typical corporate social responsibility initiatives. Arguing that there is nothing wrong with donation, charity and traditional CSR, Prof Yunus claims these have a one-time effect only. The society or the poor would have to wait to get the same benefit until the donors do the same again, which completely depends on their intention. On the other hand, he analyses, if the people get everything free because donations pours in from the international community, we are not building the economy in the under-developed countries. Moreover, life cannot go on in a charity mode all the time.

Explaining about the prediction of a future world, Prof Yunus pointed out that there may be two ways to go about it. One would be to invite the best scientific, technical, and economic analysts in the world to make their smartest twenty year projections. Another would be to ask the world’s most brilliant science-fiction writers to imagine the world of 2030. “If you ask me who has the best chance of coming closer to the reality of 2030, without posing for a second, I would say that the science-fiction writers would be far closer than the expert analysts. The reason is very simple. Experts are trained to make forecasts on the basis of the past and the present, but events in the real world are driven by the dreams of people,” Prof Yunus narrates.

The concluding few lines of the book say, “Do our dreams sound impossible? If they do, that means they are likely to come true if we believe in them and work for them… If you are willing to share these dreams with me- and to join the people around the world who are already beginning to transform their dreams into reality through social business- let’s undertake this exciting journey together.”

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Book recounts Social Business

By: Times of Assam Bureau Read time: 19 min