Muhammad Yunus: A new economic theory of selflessness

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Ghada Waly, Egypt’s Minister of Social Solidarity, and Nobel laureate, Muhammad Yunus, founder of Grameen Bank and the “father of microfinance,” got into a heated debate about the whole thesis of economic theory. The two distinguished speakers were on the panel for the “Scaling Business Models for Social Impact” plenary at the 18th Microcredit Summit (March 14-17 in Abu Dhabi).

Businesses have the ability to scale, delivering products and services on a global basis by providing for the needs and desires of their customers. But, the business focus on maximizing profits often lead limited attention to social challenges. Nonprofits have shown the ability to address a large variety of social problems, but the need to raise funds from donors often limits their ability to scale to the level of the problems they seek to address. Social businesses combine these two organizational models, using the power of business to solve some of the world’s most pressing social problems.

Minister Waly argued at the end of the session that businesses contribute to the well-being of society and to ending poverty — whether they do CSR or have a social mission or not — simply by creating jobs, paying taxes, and so on.

“Those companies that do not even do CSR [corporate social responsibility] but provide a service that is needed for society. Be it a pharmaceutical company or garment company, if they employ people, pay them fairly, and create jobs, this is good enough and this is very much needed. So you need everything.”

Prof. Yunus countered that human beings are both selfish and selfless, and the business world and economics can be structured to lift up the selfless side of human nature.

“First of all, the whole thesis of the work that we do — I said human beings are being misrepresented in economic theory. They’re shown as a selfish being…I said that’s the wrong interpretation. Human beings are both selfish and selfless. I’m only saying there’s an option that doesn’t exist today. That selflessness can be brought out in the business world. Selfless business is what we call social business. It’s about other people. In selfish business, everything is for me. It’s a matter of choice.”

Social businesses can be just as beneficial to the economy as for-profit, Prof. Yunus argued:  they pay taxes, they follow the law, and so on. He concludes, “If I can do the whole world as social business, nothing wrong will happen with the world.”

6 thoughts on “Muhammad Yunus: A new economic theory of selflessness

  1. The notion that all commercial activity bring social good because they pay wages and taxes is rather unenlightened; those payments are necessary for maximising gain appropriation in commerce.

    • true that Sanjay. Any positive social responsibility is accidental by many firms. If indeed for profit organisations did well for CRM, then this world would be a far much better place given the trillions in profits they make each year. Why are there so many social problems even in the so called developed economies? Food for thought!

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