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Nobel Laureate Muhammad Yunus:

Build a Social Business that Outlasts You


Build a Social Business that Outlasts You


Even though forced to retire, he has refused to slow down. In this exclusive interview, Muhammad Yunus speaks of unleashing the creativity latent in us all.



Build a Social Business that Outlasts You

By Fuyuan Hsiao
From CommonWealth Magazine (vol. 504 )

He was the first economist to receive the Nobel Peace Prize in its 111-year history.

Muhammad Yunus invented the microcredit business model and founded a "bank for the poor," not only changing the destinies of millions of people, but also proposing a new paradigm for capitalism.

Thirty-six years ago, Yunus borrowed US$27 and gave it to 42 poor Bengali women, allowing them to start their own businesses and support their families. Today, 8.5 million people around the world have received micro-loans from "banks for the poor." In other words, Yunus has created over eight million jobs.

The 72-year-old Yunus may have been compelled by his government to retire, but he remains decidedly active. Dressed in a long, green checkered shirt, he insisted that whenever he encounters a problem in society, he leaps in to solve it. Starting a new enterprise to address every problem he sees, he has established 60 companies to date.

In mid-August Muhammad Yunus sat down for a chat with CommonWealth Magazine.

Following are highlights from this exclusive interview.

Q: You often encourage young entrepreneurs. What is your main concern?

A: All societies care for their youth, because it is the youth that build the future. Caring for the young is common human behavior. But I bring an extra point to this common behavior. I think this generation of young people is probably the most powerful young generation in human history. They are not qualitatively different. But from the beginning of their lives, they are blessed with enormous advances in technology, and technology has become a part of them. They enjoy advanced communications technology, so they can contact each other globally. They can communicate effortlessly and instantly. It's never happened before in human history.

And one other thing: they have access to information and knowledge. They can find the latest information and knowledge on anything effortlessly. Think about previous generations that didn't have books – how difficult was it for them back then? And those that didn't have libraries. Then libraries became the most important source of information, and so the best ones were private. Now every child anywhere can access any information they want. They just go online and ask the question. It gives you tremendous power. Previous generations wasted so much time looking for information, and now you don't have to. You have extra time and creative power. Young people, like always, have lots of creativity, and now this creativity can be explored faster.

So, if you have the power, what will you do with it? It is the overwhelming question we are dealing with now. And that's why I raise this question, that this generation is not like any before it – they are very different. And the next generation, and the next, should be even more powerful, but this is the generation we are dealing with now.

Q: And yet all over the world the young generation is facing unemployment. They are called the "Screwed Generation." Some say they are hopeless. How can we help?

A: They have to help themselves. We the older generation cannot help, because our minds are set. It's difficult for us to think of new things.

The way I see the question of unemployment, I say, look at any young person in the world. He is able and capable of working, he is intelligent and creative, but the system doesn't let him use this capacity. The system throws him in the trash can. And whose fault is this? Is it the person's fault he cannot use this capacity? Or is it the system that doesn't know how to make use of these resources? My answer is, it's always the system's fault. And if the system doesn't work, we should change it, don't let it change you.

So who built this system? We did, the older generation did, and so we don't know how to undo it. The younger generation can, because they are not part of it. So they can design a new system. I think there is no reason anyone should be unemployed. It doesn't make sense. I have this little joke: Have you heard of an unemployed animal? No, of course not. So how can human beings, with all this technology, why is he unemployed?

So what is the problem here? It's because it's not natural. The system we created made a natural thing disappear, and that natural thing is my right to contribute to society. A system that makes such a thing disappear is wasteful and painful structure. So if we can design a place where no one is unemployed, then even the word "unemployment" will lose meaning.

And if we do not have unemployment, we won't have poverty, because everyone can take care of themselves, and the problem of poverty will become obsolete. But can humans build such a system? Of course we can. Look at all the software we designed. Of course we can design such a system. If we can make high-tech gadgets usable even for a normal person, even a stupid person; if anyone can pick it up and master it; then why can't we create a better system? If you can design a system that takes us to the moon and back, without actually going there, how can we not build a better system for the society?

If you can design such a system, that's great. But we will need to replace the old system with this new system. Right now we are pushing an old cart, a cart that's a couple of centuries old, and we are adjusting the margins, trying to make it go faster. But we should design an entirely new cart, a cart that can fly! This old one will never fly. It will go from 5 to 10 to 20 miles, but it will never fly. We need a machine that flies.

Q: Do you have any example?

A: There are lots of ideas. When there is competition, there will be lots of ideas. I say, don't wait for the economists to design a new system. Anyone can design it. All you have to do is find the objective and go for it. Don't go to the economists and say, we have a machine that doesn't work, can you fix it? Fixing it by a little bit is not an achievement. Don't say we have reduced unemployment by a certain percentage, when the number of people unemployed should be zero.

In poor countries, you don't have employment numbers in the news, because it's a foreign concept to them. We have that in the developed world, because it's a luxury. In poorer countries, people are making their own livings. That's an animal living, living just for today. Human beings are much bigger. We have a bigger purpose than living just for today.

Q: Your speech mentioned that the most difficult problem is creating jobs?

A: I should say, human beings have not mastered the technique of creating jobs, because they have never tried the correct way. Our starting point should be different. It's not about making more jobs, and getting more investments. We should make a new system where no one should be unemployed.

Employment is a conceptual thing. Economists assume that out of all the people on earth, some can become entrepreneurs, because they are a special people, they are the ones who will decide the investments. And the rest of us, normal people like you or me, will only be able to follow them, to look for jobs. This is where they went wrong! If we assume all human beings are entrepreneurs, then we have created a newer and better system. Because entrepreneurship is a basic human quality. Some may have discovered some new concept, but others never had a chance under this system, because in this system they were told to work hard, to get a degree, to get a job. They were never told to figure out what you can do with yourself!

Once you change the system, you change the concept of employment. Then businesses will have to work hard to persuade people to come with you. Businesses will have to persuade me – why should I have to go work for you? If it's not creative, then it is not natural thinking. So my thinking is, I have my own thinking. If you want me to work for you, you have to persuade me very hard. Why I should go to work at 9 and work to midnight? Why should I work for you? I'm not a slave. The current idea of employment came from this slavery tradition, the need to control somebody. It's not a free human idea.

Q: How can social businesses play a role?

A: That's another conceptual error. The present system is based on the idea that businesses must make money. It's the only type of business the current system can tolerate. So by accepting it, we all run for money. It's all we can do. Businesses make money, we hire more people to make more money, and that's where all the problems began. In this system the human being is misinterpreted. We are not robots. This system converted us into robots. The only thing we exist to do is to make money. It's a money-centric world we live in. It's not a natural way, but our framework made it so, and so money became an obsession. This obsession created all the problems. We no longer have time for anything else, and so everyone becomes me-centric. The current economy has no center of attention other than making money.

So, if everyone is making money, who solves the common problems? We say, the government! So we dump all our problems there, because we give them taxes. We feel we can say, "I'm busy with making money – you have to solve the problems. All I can do is to send you some of my money." It's a very wrong interpretation of human life. We are not robots. We have other dimensions and creative power. We can use our creative power to solve problems, and we can do so more efficiently than the government, because the government works through bureaucracy. Every government ministry was created to solve one problem, and then they have certain budgets, so we are just throwing money into problems. And the government tries to solve problems by charity, by giving money to different people. But it's not effective. It's passive, and it takes the initiative from the people they are helping.

Society should help people by lifting their energy, by teaching them to solve problems. Charity takes away initiative. So you should ask yourself, to what extent are you helping this person? Are you making him more active? Are you putting him into an exploratory mode, rather than sleeping mode, where we take care of you, you just take it easy? Because that is not solving the problem.

And why can't the people do that? I'm not saying that charity or philanthropy is not good, but there's a more effective way, and that is through business. Not conventional businesses that make money, but social businesses that solve problems, that use the money and creative power and contacts all businesses have to solve problems.

A single person may not be able to solve a problem, but we as a social business can, and it makes them happy and solves their problems, and I get my money back, I recycle it and solve more problems, and so helping others becomes self-sustaining rather than depending on external infusion of money. This is what we call a social business. Then it makes more sense, because we are not robots, we can use our human capacity to solve human problems, rather than coming up with clever ideas to make money. Again, making money is not bad, but the same creative power can be used to solve problems. But today that door is closed. We have taken different kinds of human beings and made them into money-making robots. That's why they say, "Business is business." We have no other room for human behavior. We behave like machines. You may be my father, son or daughter, but I make no exceptions for anyone, because all we do is make money. That is the concept behind the phrase, "Business is business." But there should be a variety of businesses, and social business is the second type. This is a business without dividends.

Q: You are 71 years old. Right now, the baby boomers are retiring. How do you think they can contribute to today's youth?

A: I'm glad you didn't use the word "older" people. You said "retired" people. Again, that's the terminology – retired. It's used with an idea that you no longer work. Because there's only one kind of work: You work for a company or the government, and when you stop working for them, that's it. But most of the time, that kind of work is a drudgery. You don't like it, but you need to make a living. And when you retire, that means you are free from work and the boss. But that doesn't mean you can't work. It just means now you work for yourself. So there are so many options. What you could not do before, you can do now. Before, you did things you didn't like, but you had to do it, because it was the best-paying, best-located job for yourself that you could find. But you never liked it. It didn't suit you. But you must make a living, so you did it.

But when the time comes when you are not employed, you can use yourself the way you want. So retired doesn't mean old, though the two phrases get mixed up. You are still active, but not in the old routine. Now you can make your own routine. You are very flexible. You can enjoy doing what you didn't have time to do before. It doesn't mean going on a world cruise 50 times to look for adventure. The first time may be fine, the second time won't be as exciting, and the third time will be boring. So you go through excitement very quickly if retiring just means leisure. You should be busy doing things that please you. So all the things you think that can be done, can actually be done.

We need institutions to help "retired" people put their time to good use. It's common for people in developed countries to celebrate their 95th or 100th birthdays. And even then they can do things. They are not bedridden. You have a lot of time between 95 and when you retired at 65. A lot of useful and creative time. All the unfinished agendas you had, this is the time. So what can we do with that time? One way is to volunteer oneself to charity, or to use our accumulated wealth in a meaningful way. But I say there is another way – to build a social creative business that will outlast you. Philanthropy will disappear, because the money you donate is not coming back. But a social company, like all companies, will keep growing and growing, so that 100 years after you are gone, you are still doing good things, and the company bears your name, and people remember you changed the world. That's the creative power to solve problems. That's what retired people can do. To retire means to start a new life. It's not the end of my life, but the beginning of the life that belongs to me, a life not as an employee, not as a CEO or a division head. Those job titles were slots I fitted into, roles I acted according to the script for the slot. But now I have my own script, I write and rewrite my script every moment of every day, and I live as I am.

Q: What kind of social businesses can we create?

A: Well, what kind of problems bother you? All social businesses are about solving problems. If it's not about solving problems, it's not a social business. So which problems should you try to address? It's the ones I know how to handle, the ones that always bothered me, so I create a business to address that problem. And if I know I can do it, I'm probably not thinking about it only after I retire. I've probably been thinking about it since the 1st day of my job at the company. I think about what to do when I retire, what to do when my prison sentence is over. I've been planning it since the 1st day I entered prison. I have labored for it, planned for the day when I am free, when I come out of the jail's gate. But I felt, first I had to go through the sentence.
So in my experience, I've always had creative ideas, just like anyone else. And I never worked for somebody else, so you can say I was retired a while back. I always did what pleased me. And every time I do it, I create a company, and this is where the idea for the social business came from – it was forming a company to solve problems.

Q: There is great inequality between the poor young and the rich old. How do you relieve the tension between the generations?

A: It all depends on how you look at the concept of rich and poor. I say, it's the "poor old" and the "rich young." They are rich with creative power, they have the technology to use that power with. The old don't even know how to use mobile phones. They fumble turning on little gadgets which are bread-and-butter for five- and seven-year-olds. That's the rich person you are talking about! Money doesn't mean anything. It's talent and ability that makes a person wealthy. So the young are rich; the old are poor.

But what should the young do with this rich ability? So I say, there is a mismatch between the old and young, because the young are far ahead of the old. But traditionally we say, "The older, the wiser." Today it's difficult to make that statement. It may be the younger you are, the wiser you are, because you have the information. The older people only have old ideas, which don't match the times. They are missing information, and they never checked for updates. The young, at the minute of doubt, can look it up with Google or Wiki, as it is right now, and not from an old book someone somewhere wrote a long time ago, filled with obsolete ideas. This is what old people do – they don't see anything new. The young are fresh and current, so a 10- or 12-year-old can give the final verdict on any problem in the family, because he checked it out on the Internet. He has the latest information.

So we shouldn't impose old ideas on the young. We shouldn't pull them back. We shouldn't say, "Don't do this," or "Don't do that." This is what slows the young people down. Better than imposing on the young, we should let them lead the way, to find a better answer and a clearer path.

Q: How can one person change the world – we are so small and powerless?

A: Changing the world needs only one person. It happened in the past. Most new ideas came from one person who came up with the idea to make the world different. So this isn't a new concept at all. The new thing I emphasize here is, anyone can do that – we don't have to wait for someone else. We always think we have to wait for someone to change everything, a political or business leader that transforms everything. But the power to transform is embedded in all of us. We do not pay attention to this power, because we were told a different story, that is to find a job, to be successful, to get the promotion before others, and we are only running from slot to slot. So we work extra hard to get the slot before anyone else. But we don't think we can do more than working for the company. We don't think we can change the world, because no one ever told us.

But young people get the message, they know each person can change the world, and we can all do it at the same time. So no one takes a chance. If someone invents something, you can do it a different way. Changing the world is not a big deal – that's something I want to emphasize.

You don't start with solving global starvation. Many people think, "Two billion people go to bed hungry – I have to solve that." You don't have to solve it. You start with two people. If you can take care of two, you can take care of two billion. Repetition of the good idea is someone else's job. My job is to start as small as you can get, even with one person. And if you can take care of two people, you have developed the seed, so now making the plantation is easy. So the task is developing the seed for any problem.

If you can make two or three or five illiterate people become literate, you can help billions. You don't need a school and a teacher. You can make a game. You get a lot of fun with learning that way. People love to play games and learn, it's so easy to do that now with touch screens. You have beautiful and colorful things coming towards you. And so we message each other, and we learn to read through playing with and understanding each other. An illiterate person is not stupid. He just hasn't learned to write down the things he can do in his mind. I don't need someone beating me over the head to learn. I can learn through having fun. And if I can do it for five people, I can do it for five billion people. That's the beauty of it.

It's the way I always worked. Everything I did, I started tiny. If it worked, I repeated it, and if it didn't work, I stopped.

Q: You've been called the world banker to the poor…

A: The poor don't have financial services, because no one will touch them. They are called the Untouchables, because they are not credible. But they are more than touchable – they are huggable. It's no problem. We proved it can be done. There's no reason to deny them financial services. It's where we started from.

And I'm not saying my way will work forever. Nothing is best forever – it's only best at that time. That's the power of human creativity. Someone will always come up with a better idea. It's the definition of progress. The first automobile ever invented was a sensation. Now you couldn't possibly sell it. It's like a toy. The first plane that really flew was a sensation, and now it's hanging from a ceiling in the Smithsonian museum. People laugh at it now, but it created a revolution once. So this is how it is – someone makes the first breakthrough, then someone makes it ever better and better.

Right now, banking to the poor is a footnote in the entire financial services. But it doesn't have to be, it can potentially cover more people than any other bank. This system should be the driving force, not just a footnote. But because our minds are set, we are stuck with it. They don't talk about it in the media, because it's a side story, a tiny story, if a story at all.

Q: How do we make capitalism more human? Many institutions are now redefining what is progress. What is a prosperous society to you?

A: Like I said, capitalism solved many problems, but it created more problems we could not solve, like poverty and unemployment, poor health and unnecessary death, income disparity and environmental hazards. Its problems are built into the system. It's not the individual's fault – the system pushed us in the wrong direction and made the problems worse. We must undo the system. This is what we talked about at the start of this interview. We must make a better system. I say, trash the current system that made all the problems. Throw this system into the garbage. Don't let the system throw me away, because I cannot accept the punishment when I'm not responsible for it. We don't solve the problem by making little changes here and there, by making little exceptions to the rule. These are small amendments trying to take care of a problem created by the system. It's the failure of the system you are trying to cope with, but the ways you cope are not good. It takes initiative from humans. It makes people part of a human zoo. They are not the same animal they were in the forest. You feed me and take care of me, but I'm not the creative, active human being I used to be. It's like bringing a lion or elephant into the zoo. You can take care of it, but it's not what it used to be. I enjoyed my old life. You take it away, you put me into a cage, and now I don't even know what a tree looks like. So it's the same with humans, I don't really know what work is. You put me in this slot, and I make money, and I buy groceries and pay the rent, but I don't feel like I really did anything. So we need to change the current system – there's no debate! Little reforms here and there are temporary solutions. It only delays the progress of another crisis. We didn't change anything. It's an old car that doesn't work. You fix it here and there, so the old car goes for another 20 miles and then it breaks down again, because we didn't change the engine. We need a new engine, rather than to fix the old.

So social business is my suggestion of change. Capitalism is standing on one leg right now, because you have misinterpreted humans as robots. You must change it. Give us back the human element, the need to do things for others. So I have a social business to balance the system, so capitalism can stand on two legs rather than one. And maybe we will need to discard it later, but right now social business is the solution. You can make money and solve problems at the same time. If you can do this, you can solve more and more problems. Social business brings us a new dimension, a new kind of capitalism. And someday we might move on to the next phase, to solve the problems that social businesses cannot solve. But within the framework we have, this is the right direction.

Q: Last question: What is well-being? How do you suggest young people or older people achieve well-being and happiness?

A: Well-being is a physical thing that can be solved with medical science. Science will always progress. But will the fruits of science come to me? If a child has a troubled heart, it may be easy to fix. But is it available to the poor child? Science gives the solution, but no one brings it to him. Science keeps moving. It can keep you alive beyond 100 years. But is it affordable and available to everyone? That's the problem the economy and the society must solve, not science. That's the shortcoming of the capitalist system: Inequality will become more acute, because the lucky will have everything, and the unlucky will not have even an aspirin, even to save his life. So availability and affordability is key. Solutions are not available because you want to make money. Who cares if you die? If you pay me, then I will operate and give you medicine. It might cost me 10 dollars to produce the pill, but I want 1000 dollars for it, because I want to make huge money. So I won't give it to you for 10 dollars, even to save your life.

Happiness is another issue. What is it? One way I express it is, to some people, making money is synonymous with happiness, it's a measure of happiness. To some people it is so – money is happiness, success makes you happy. That is understood and established, that is okay. But I think making other people happy is also happiness. I think it's super-happiness. But because most people are not allowed to taste it, they don't know what it's like. Why can't we open the door? If you taste it and like it, then you can move in its direction. If it makes you happy, why not do it and be happy? We have to open the door, but now there is only one kind of door, only one kind of happiness. I think there are two sources, you can make yourself happy by centering everything towards you, be me-centric. Or you can be happy by making others happy. Choose some of the two, combine them the way you want in any mix. I think when you have super-happiness, you will forget about yourself. But it depends on what makes you happy. I want to make an impact on the world and others. We are all here only for a short period. And I want to make a signature. I want people to remember I was here. That's happiness. I'm happy, super-happy doing what I do, or I wouldn't do it.

Transcribed by Yuan Chou