The New Economics of Zero Poverty, Zero Unemployment, and Zero Net Carbon Emissions
Muhammad Yunus wants us to know that capitalism is doing just what it is meant to do: create and concentrate wealth. But in his book A World of Three Zeros, Yunus advocates rethinking the basic tenets of capitalism, given that poverty and unemployment demean so many, and that climate change threatens so much. The Nobel Peace Prize winner, known for his creative solutions to alleviating poverty, questions Adam Smith’s assumption that a “human being is basically a personal-gain- seeking being” and asks us to consider the social dimension to the decisions and investments we make. He lays out a new framework, supported by his own successful economic experiments, for better tapping human capital to solve the world’s problems.
Wealth concentration is becoming worse and worse every day. Today there are only 8 people in the world who own more wealth than the bottom 50% of people. So if you take 8 billion people on the planet right now, wealth of 4 billion people equals the wealth of 8 people. A couple of years back it used to be 62 people have more wealth than the bottom 50%. Today 62 has become 8. (…) So far it was not noticeable. It was a slow motion concentration. Now it is becoming exponential. (…) To my eyes, this is a ticking time bomb. It’s a question of explosion. (…) Anger at the bottom will be just endless. You cannot contain it.
The central problem with capitalism as it is now practiced is that the system recognizes only one goal — the selfish pursuit of individual profit. As a result, only businesses designed around this goal are recognized and supported. Yet millions of people around the world are eager to pursue other goals, including elimination of poverty, unemployment, and environmental degradation. All three can be dramatically reduced if we simply begin designing businesses with these goals in mind. And that is where social business plays a crucial role. A social business, as defined by Yunus, is “a non-dividend company dedicated to solving human problems.” Investors who provide the capital to launch these businesses receive back their initial investments only. After the investment amount is paid back, profits from these companies are plowed back in and used to expand their services or products so more people can benefit.
