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Published: November 25, 2008

 
 

Best Business Books 2008: Capitalism and Community

The loss of these cultures matters deeply — not only to the people who live in them, but for the spiri­tual and ethical well-being of those in the West. The price we pay for global material progress, Marglin writes, is “the weakening to the point of breaking of ties of commun­ity.” He invites readers to “reflect for a moment on the ethical implications of destroying ways of being that are different from our own” and the impact it has on our ability to learn about community and restore “balance to our own lives.”

The Dismal Science should be read for its view of an alternative economics that accounts for the interests and capabilities of community. Individualism is balanced with a more holistic, multi­dimensional view of human nature; algorithmic knowledge as the sole legitimate source of wisdom is balanced with the experiential, intuitive, and sensory knowledge needed to function in an uncertain world; the nation-state as the only legitimate social grouping is balanced with allegiances to family, neighborhood, and community; and unlimited materialism and a mind-set of scarcity (no matter how rich, you never have enough) are equilibrated with more noble aspirations in a culture of abundance.

Marglin’s work is part of a courageous inquiry under way in some areas of the global development community; people there are examining the intended and unintended consequences of many years of intensive development work and huge expenditures of funds. His clear expression of the assumptions underlying many Third World interventions and development efforts helps explain the West’s record of terrible failures.

Starting 4 Billion Engines
Muhammad Yunus, the author of the year’s best book in this category, Creating a World without Poverty: Social Business and the Future of Capitalism, is the planet’s most recognized “unreasonable entrepreneur.” He and the Grameen Bank have demonstrated the power of a new economics based on the creative potential that exists in everyone, including those traditionally discounted: the most economically poor citizens of the world.

In accepting the 2006 Nobel Peace Prize, Yunus stated that “poverty is created because we built our theoretical framework on assumptions which underestimate human capacity, by designing concepts which are too narrow (such as prevailing views of business, creditworthiness, entrepreneurship, employment) or developing institutions which remain half-done (such as financial institutions, where the poor are left out). Poverty is caused by the failure at the conceptual level, rather than any lack of capability on the part of people.” (Emphasis added.) Yunus’s aim is to demonstrate that creativity and entrepreneurship are universal human capacities that, when properly financed and nurtured, can transform the lives of the two-thirds of the world’s population currently living in poverty.

Yunus’s use of microcredit to finance this transformation is legendary, and the evidence of its success, particularly in his native Bangladesh, is indisputable. The Grameen Bank, formalized in 1983, has provided more than 7 million poor people (97 percent of whom are women) in 78,000 villages in Bangladesh with $6 billion in microloans, which have been repaid at a rate of 98.6 percent. The bank already has served 80 percent of Bangladesh’s poor (its goal is to serve them all), and nearly 60 percent of these borrowers have now worked their way out of poverty. Grameen’s borrowers are also its owners, holding 90 percent of its shares, and with the exception of several years in which Bangladesh faced catastrophic floods that resulted in significant loss of life, homes, and livelihoods, the bank has been profitable since its inception.

Bangladesh, once called “an international basket case” by Henry Kissinger, is now described by Yunus as a “living laboratory” for human self-transformation. He thoroughly documents how over the past two decades, the poverty rate has dropped dramatically; economic growth and incomes are on the rise; population growth has slowed; and health care, life expectancy, educational opportunities, and access to shelter, sanitation, and telecommunications have all improved. Meanwhile, the Grameen model has been replicated in developing countries around the world. In 2006, the Microcredit Summit Campaign, which involved 137 countries, set a goal to lift half a billion people out of poverty, which is not unreasonable given the model’s past success rate.

 
 
 
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