Non-Fiction: For a kind capitalism

Poverty, deprivation and marginalisation are still the fate of nearly three-fourths of mankind. In the Third World, which is subject to a double exploitation — that is, by the local ruling classes and by the advanced world — the weak need some succour within the confines of capitalism and its various freedoms. As Muhammad Yunus writes in Building Social Business: The new kind of capitalism that serves humanity's most pressing needs, one may become "impatient with the terrible social problems we have created and imposed on our fellow humans. But instead of trying to devise giant plans to change the world all at once, I urge … to 'start small'. Create a tiny plan to help a few people at a time and put it into practice immediately." And Yunus has launched a successful movement, which is now famous worldwide, to apply his theory. The Grameen movement was born in a small place called Jorba where Yunus discovered 42 persons who had become debt-slaves after borrowing small sums of money from a money-lender at an interest rate of 10 per cent per week. Their total debt at the time was the equivalent of $27 which Yunus repaid on their behalf. He then persuaded a bank to give these people small loans against his guarantee. He lost nothing as they always repaid the loans on time. It was then that Yunus launched the cooperative bank Grameen. The poor chipped in to run the bank which gave them loans without collateral, so they could start small businesses and generate income. Ninety-seven per cent of the bank's borrowers were women, who were generally discriminated against by commercial banks, and their repayment rate was 98 per cent. Profit was not distributed, though one could withdraw one's capital. Thanks to the bank, beggars turned into traders, some selling small items on their begging rounds, others giving up begging to pursue business. The bank also gave students loans to finance higher education. This success encouraged Yunus to establish a company, in collaboration with the French company Danone, to sell clean water at low rates, again without profit. Yunus calls these enterprises "social business". The people working for them are well-paid but get no profit. There is now a plan to start profit-making companies on the same cooperative basis. Yunus rightly believes that the scope for such projects is wide. For example, this principle can be applied to transfer advanced medical technology to poorer countries, treat urban waste, build irrigation projects, and so on. The system can also benefit the poor in rich countries. Yunus believes that this kind of cooperation can humanise the spread of globalisation, where, instead of the "strongest taking all," the poorest too can have "a piece of action". As he puts it, "poverty is an, artificial, external imposition on a person"; it can therefore be removed. Yunus is right, except that the cooperative movement, though inspiring, can only operate on the margin of capitalism. It cannot trespass on the ground which serves the interests of the capital itself. Cooperatives started in countries which were first to industrialise, such as Holland and England. There they were confined to distribution, such as low-price shops, and were not successful in the field of production, which the capital was not prepared to share. They have greater scope in the Third World, where the capital has not yet seized the entire economic space. It is to Yunus's credit that he grasped this opportunity to help turn marginalised people into self-dependent citizens by means of cooperation. It is an experience other Third World Countries can learn a lot from. Building Social Business: The new kind of capitalism that serves humanity's most pressing needs (Economics) By Muhammad Yunus Public Affairs, New York ISBN 978- 1-5864-8824-4 256pp. Rs1,795