A World of Three Zeros by Muhammad Yunus. A positive challenge to the economic status quo.

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A World of Three Zeroes: the new economics of zero poverty, zero unemployment, and zero carbon emissions by Muhammad Yunus tackles economic inequality through the lens of social business.  Yunus presents numerous examples of social businesses that are successful and growing throughout the book and presents a solid argument for business to be focused on people and problems instead of share holder profits.

Yunus begins in chapter 1 with an explanation of economic problems that exist within current systems.  Even though I find myself aligned with Yunus’ social business idea, there are times throughout the book I want more detailed analysis.  This longing begins in chapter 1.  Yunus states the following on page 7 in respect to current capitalist systems,

But the basic reality is that wealth concentration is an all-but-inevitable, nonstop process under the present economic system.  Contrary to one popular belief, the richest people are not necessarily evil manipulators who have rigged the system through bribery or corruption.  In reality, the current capitalist system works on their behalf.  Wealth acts like a magnet.  The biggest magnet naturally draws smaller magnets toward it.  That’s how the present economic system is built.

The text continues by presenting poor people as having a small magnet that is difficult to hold unto because of larger magnets that attract the smaller magnets.  There are many questions I want to answer around this metaphor.  How do the wealthiest people attract money?  What does it look like?  What are the numbers?  How do they maintain their wealth?  Where or on what do poor people lose their money?  Why?  How often and how much do poor people lose their money to the rich?  What is the means of transfer?  Yunus doesn’t provide numbers or anecdotes that demonstrate this process in chapter 1 of A World of Three Zeroes: the new economics of zero poverty, zero unemployment, and zero carbon emissions.

As the critique of capitalism continues in chapter 1, Yunus tackles the idea of selfishness.  According to Yunus, selfishness is presented as the driver behind capitalist economics.  But real people are much more complex.  Yunus sets up the Real person with the following from page 11,

The Real Person is a composite of many qualities.  He or she enjoys and cherishes relationships with other human beings.  Real People are sometimes selfish, but just as often they are caring, trusting and selfless.  They work not only to make money for themselves but also to benefit others.

Why we do we create personas like Yunus’ Capitalist Man?  Can we fix economic inequality simply by focusing on the Real Person opposed to the made up Capitalist Man?  Yunus seems to say no because the capitalist system serves the Capitalist Man more than anything.

Can modern capitalism be worker and people focused?

Chapter 2 of A World of Three Zeroes: the new economics of zero poverty, zero unemployment, and zero carbon emissions lays out Yunus’ experience in tackling problems, specifically for the poor, by creating a business that is meant to solve the problem for people above all else.  On page 31 social business is defined as, “Social business is about using creativity to solve human problems in a sustainable way.”  And this definition leads the book into a discussion of how social businesses can create the 3 zeros.  The 1st zero is zero poverty.  Chapter 3 presents the many recent challenges economic systems have faced, especially since the 2008 financial collapse.  Another metaphor is presented to demonstrate the challenges the capitalist system creates on page 49.

We have to accept the fact that there is no semblance of ‘wealth distribution’ in the current system.  Instead, the system is built for one-way concentration, the way a raging forest fire sucks up all the oxygen in the forest.  There is nothing in the system that can stop this process.  It is designed for wealth monopoly rather than wealth distribution.

Once again, I’m left wanting to know more about what this raging forest fire looks like with numbers and examples, yet Yunus doesn’t provide this data in A World of Three Zeroes: the new economics of zero poverty, zero unemployment, and zero carbon emissions.  Yunus does present examples of how social business might tackle a problem such the description of a joint venture between Grameen (a bank created by Yunus) and Danone, a French food company.  Together, the 2 groups provided Yoghurt at a price just enough above costs so that the venture could sustain itself over time.  This is definitely a noble and worthy cause.  But the venture only started because Danone agreed to make a capital investment with an agreement that the company would not make a profit on the investment.  It seems that this social business only works with the generosity of a business built by capitalist profits.  Examples like this make me question Yunus’ ideas about social businesses.  Do we need a new label or do we simply need to fosture more generosity from capitalist ventures?  Can we do what Yunus desires, create businesses with a focus on sustainability and the solving of problems for people of profits, with more generosity and focus from companies now on people?

What keeps people in poverty?

The next zero, zero unemployment, is presented in chapter 4 of A World of Three Zeroes: the new economics of zero poverty, zero unemployment, and zero carbon emissions.  The data around employment after 2008 is fascinating and frightening at the same time.  Yunus diagnoses the problem on page 69 as, “This problem of unemployment is not created by the unemployed people themselves.  It is created by our grossly flawed conceptual framework, which has drilled into our heads that people are born to work for a few fortunate capitalists.”  Yunus continues with a proposal that young people also have the choice to become entrepreneurs.  Yunus describes a design lab which is a sort of camp for potential entrepreneurs where they have the opportunity to pitch a business plan.  The best plans are chosen for support to start their social business.  The idea is wonderful, but once again I ask myself, “Where does the money to fund these new businesses come from?”  It seems that capital is needed to start this process which makes me wonder if this isn’t just capitalism with a focus on people instead of profits.  The line between what Yunus describes as a social business and capitalism seems thin.

Numerous examples of social businesses started with the design lab and micro equity versus credit follow.  The 3rd zero, zero net carbon, is discussed in chapter 5.  Yunus uses Bangladesh to demonstrate the need for zero net carbon emissions.  The realities that will soon happen for countries like Bangladesh are frightening.  But even without the emotional appeal of the problems that carbon emissions will cause, the idea of zero net carbon seems the most plausible as presented by Yunus in chapter 5 of A World of Three Zeroes: the new economics of zero poverty, zero unemployment, and zero carbon emissions.  He is not suggesting that countries stop using energy to grow but that they invest in cleaner technologies that continue to become more efficient and quality options to fossil fuels.  Although it is clear that the world may need to choose to use cleaner energy options, there are clear economic benefits to switching over to cleaner energy sources.  The examples that Yunus uses clearly demonstrates the benefits of zero net carbon.

Economic and environmental common sense?

In Chapter 6 of A World of Three Zeroes: the new economics of zero poverty, zero unemployment, and zero carbon emissions, Yunus lays out a new economic future.  The chapter begins by describing some series problems that might arise from economic inequality.  Perhaps we are already experiencing some of these major problems in places like Venezuela and even in pockets of America.  The chapter continues by discussing 17 sustainable goals with a target date of 2030.  These goals are huge and some seem quite broad like number 8, Decent Work and Economic Growth.  This goal attempts to define Decent as to promote sustained, inclusive, and sustainable economic growth; full and productive employment; and decent work for all.  These goals are huge by viewed with the scope of Yunus’ numerous examples of social businesses and the positive impact they have for people perhaps these goals can be reached sooner than I think.

As Yunus continues the discussion he turns the focus to youth.  Based on the data he provides it seems young people support capitalism less and less as time goes on.  This isn’t a surprised based on where the economic world has been in the last decade.  A huge financial crisis with stagnant wage gain and a deterioration of the middle class seem to be evidence against the effectiveness of capitalism.  But my question of Yunus is this.  Do we really live in capitalist economic systems?  Does capitalism create the magnet of wealth he described earlier in the book or is it something else?  If it is something else, how do we measure what affects our economics in a way that allows us to have data that we can use to affect change?

I find myself back at this question throughout the discussion by Yunus in A World of Three Zeroes: the new economics of zero poverty, zero unemployment, and zero carbon emissions.  Can the examples of social businesses that he presents exist without the backing of the capital provided to said businesses from a capitalist system?  I continually come to a no answer which leads me to disagree with the dichotomy that Yunus seems to present.  Perhaps the idea of capitalism has been ingrained in me in a similar way that he describes throughout the book.  But it seems that things such as how we regulate markets have a huge impact on the economic inequalities that exist.

Often in the examples presented in the book, there is a regulation or stipulation attached to the capital used to start a social business.  The focus must be on helping people and solving problems, not a share holder profits.  Even so, many of Yunus’ examples demonstrate investments that expect some sort of profit from the social business.  And the examples of large corporations giving money to programs without an expectation of an investment return seem to offer those companies must public goodwill and advertisement as a return on investment in disguise.

Perhaps we should regulate how companies distribute their profits.  There is a lot of noise about CEO pay as of late but what if we regulated how much profit can go back to shareholders?  Can we incentivize companies to pay people more instead of parking profits into dividends and share buybacks?  Can we create a social capitalist economic system that prioritizes solving problems, workers and communities over shareholder profits?  I think we can and the examples Yunus provides throughout A World of Three Zeroes: the new economics of zero poverty, zero unemployment, and zero carbon emissions demonstrate how capital can be used differently with regulations that govern how businesses work.

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