Monday, December 18, 2006

We Can Put Poverty in the Museums

" I believe that we can create a poverty-free world because poverty is not created by poor people. It has been created and sustained by the economic and social system that we have designed for ourselves; the institutions and concepts that make up that system; the policies that we pursue.

Poverty is created because we built our theoretical framework on assumptions which under-estimates human capacity, by designing concepts, which are too narrow (such as concept of business, credit- worthiness, entrepreneurship, employment) or developing institutions, which remain half-done (such as financial institutions, where poor are left out). Poverty is caused by the failure at the conceptual level, rather than any lack of capability on the part of people."

Check out the speech that this years Nobel Peace Prize winner, Muhammad Yunus recently gave upon accepting his award.

It’s interesting to feel the ‘cultural zeitgeist’ come to fruition, to read a speech from a Nobel Peace Prize winner that reflects what you yourself have been reading and thinking for years, assuming it would forever remain a pipe dream, a long lofty goal, and now all of this – this push to end poverty, to fight for equality, etc – is suddenly a part of the mainstream culture. (By the way, I’m in the midst of writing my comp exams for my MA in American Studies, so excuse the academic leanings today…)

In particular, being an entrepreneur that is very interested in the idea of creating businesses that focus on creating what I think of as an ‘equilibrium’ in their operations, (ie: the company does well, it produces a good that is of sustainable value to society, it treats those that work for and with it well, etc.) I found what Yunus had to saw about social entrepreneurship particularly interesting:

“By defining "entrepreneur" in a broader way we 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 (such as, maximizing profit), now has two sources of motivation, which are mutually exclusive, but equally compelling—a) maximization of profit and b) doing good to people and the world.

Each type of motivation will lead to a separate kind of business. Let us call the first type of business a profit-maximizing business, and the second type of business as social business.

Social business will be a new kind of business introduced in the market place with the objective of making a difference in the world. Investors in the social business could get back their investment, but will not take any dividend from the company. Profit would be plowed back into the company to expand its outreach and improve the quality of its product or service. A social business will be a non-loss, non-dividend company.”

Anyway, do check out his entire speech, it’s worth the read, and its reassuring to know that there is a world full of people like him, slowly working away to make things better

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