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Hassan H

Yunus Social Business

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Is Social Business the future of capitalism ?

Social business, as the term is commonly used, was first defined by Nobel Peace Prize laureate Prof. Muhammad Yunus and is described in his books Creating a world without poverty—Social Business and the future of capitalism and Building Social Business—The new kind of capitalism that serves humanity's most pressing needs.

In Yunus' definition, a social business is a non-loss, non-dividend company designed to address a social objective within the highly regulated marketplace of today. It is distinct from a non-profit because the business should seek to generate a modest profit but this will be used to expand the company’s reach, improve the product or service or in other ways to subsidise the social mission.

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  • Jun 1 2012: This idea assumes that everyone is interested in serving the common good. This is simply not true. The majority of people put their own welfare first. Any scheme that does not take that fact into account is doomed to fail just as communism has.

    There will always be those motivated by charity but there will always be those motivated strictly by profit as well. What is a business owner's motivation to succeed if they don't get to keep their own profit? I believe the solution is to make the salary of a company's lowest paid employee a percentage of the salary of its highest-paid employee and/or the owner's profits. This system acknowledges the inevitability that people are motivated by profit, but ensures that everyone shares in that profit.
    • Jun 3 2012: I like your salary idea Lee. It makes me reflect that we have so few models to choose from ( Capitalism, Communism, Socialism) (though all are practiced slightly differently in different countries). I often think of economic theories as religions and my biggest issue with major religions is that they are all thousands of years old. They are so simplistic, reflective of a simpler and more ignorant time. We know the world is round now and we have science-based technologies that pervade modern life but we still have fairy-tale religions! I think we also have fairy-tale economics reflective of a time when resources seemed endless and "progress" seemed inevitable. We need a new economic model that reflect what we know, and what we want.
    • Jun 5 2012: Lee, I agree with you. Most of people aim at satisfying their own interest. But satisfying one's own interest does not mean making profit. I think people want to make profit for two main reasons. First, making profit means earning money and earning money means having a power (power to buy everything you want, power to do everything you want). Then, they want also to make profit because when we do so, we get (social) recognition from our peers. Therefore people aim at making profit because they want some power and some social recognition. Do you agree?

      Social business can meet these two demands. Indeed, if you reinvest your profits into your own business, your business will get bigger and you thus get more power in so far as you manage more salaries, you have to design strategy to enter more markets and so on. That could be motivations which are not strict profit. Besides running a social business means that you are aware of social or environmental issues and that you are keen to solve them. As a result you could get some social recognition. If we consider the social trends solving these issues will be certainly more and more sociall valuable.

      Social business is not a new economic model in itself. As your salary idea,Social business only aims at reshaping capitalism with regard to new social trends. You could say that it is pie in the sky but I believe that social business paves the way for a world in which people take care of themself (first) and the others (then).
      • Jun 5 2012: Corporations already donate to charity, or even start charities of their own. What is the difference between that and what you are proposing?

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