Licenciado

Social Business Entrepreneurs Are the Solution
Muhammad Yunus
Presented at the Skoll World Forum on Social Entrepreneurship,
Said Business School, Oxford University,
March 29 - 31, 2006
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Social Business Entrepreneurs Are the Solution
Capitalism is Interpreted too Narrowly
Many of the problems in the world remain unresolved because we
continue to interpret capitalism too narrowly. Inthis narrow interpretation
we create a one-dimensional human being to play the role of entrepreneur.
We insulate him from other dimensions of life, such as religious, emotional,
political social dimensions. He is dedicated to one mission in his business
life --- to maximize profit. He is supported by masses of one-dimensional
human beings who back him up with their investment money to achievethe
same mission. The game of free market, we are told, works out beautifully
with one-dimensional investors and entrepreneurs. We have remained so
mesmerized by the success of the free market that we never dared to
express any doubt about it. We worked extra hard to transform ourselves,
as closely as possible, into the one-dimensional human beings as
conceptualized in theory to allow smoothfunctioning of the free market
mechanism.
This theory postulates that you are contributing to the society and the
world in the best possible manner if you just concentrate on squeezing out
the maximum for your self. When you get your maximum, everybody else
will get his maximum.
No wonder sometimes doubts appear in our mind whether we are
doing the right thing by imitating the entrepreneurdesigned by the theory.
After all, things don’t look so good around us. We quickly brush off our
doubts by saying all these bad things happen because of “market failures”;
well-functioning markets cannot produce unpleasant results --- we
reassure ourselves.
I think things are going wrong not because of “market failure.” It is
much deeper than that. Let us be brave and admit that it is becauseof
“conceptualization failure.” More specifically, it is the failure to capture the
essence of a human being in our theory. Everyday human beings are not
one-dimensional entities, they are excitingly multi-dimensional and indeed
very colourful. Their emotions, beliefs, priorities, behaviour patterns vary
so much that they can be more aptly described by drawing analogy with
producingmillions of colours and shades by mixing three basic colours in
varying proportions.
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I am arguing that no harm is done to the free market if all businesses
are not profit maximization entities. By asserting that businesses by their
very nature must be of only one kind, profit maximization kind, and by
practicing it as an axiom, we have created a world where social problems
remain unaddressed.Some times these problems partially addressed by
philanthropy, or left to be addressed by the governments.
I postulate a new world of business where businesses will be of two
kinds :
a) Well-known and well-established profit maximizing kind, which
are devoted to making private gains. (Let us call them profit
maximizing enterprises or PME.)
b) Social benefit maximizing kind, which are createdto do good to
people, not paying any attention to making private gains. I am
calling them social business enterprises (SBE).
Social Business Entrepreneurs Can Play a Big Role in the Market
Instead of one-dimensional people we can think of a world with twodimensional
people. To see how the theory of firm will work in such a world
we can simplify it by assuming that there two kinds of people,each kind
maximizing a separate objective function. One type is the existing type,
i.e. profit maximizing type. The second type is a new type, those who are
not interested in profit-maximization. They are totally committed to making
a difference to the world. They are social-objective driven. They want to
give a better chance in life to other people. They want to achieve their
objective...