The essay “Giving Capitalism a Social Conscience” discusses the different ways in which countries can combat poverty among the population, as argued by Grameen Bank founder Muhammad Yunus. Yunus contends that poverty is caused by the current social system, not inherently by poor citizens. Yunus states in his novel that capitalism is in trouble, and that something must be done to reform the system because it has become a human inspiration. According to Yunus, social enterprises play an important part in alleviating poverty (Bornstein, 2017). The author records that despite Yunus advanced age, he is still advocating for co-development of social businesses in numerous countries. Yunus in his book asserts that the current economic problems that poor people are facing cannot be solved by the existing markets because they are personal-profit-centered.
During the interview with David Bornstein, Yunus gives both a warning and a solution to the current economic problems. A warning where he cites an Oxfam report that says less than ten people own more wealth than the bottom 50 percent of the population in the world (Bornstein, 2017). He further warns capitalism sucks wealth from the poor to the top. Yunus says that concentration of wealth at the top destroys politics and hence governance. When the author asks whether all the economic challenges are to be blamed on capitalism, Yunus responds by citing William Smith’s works where human beings are defined as creatures who are driven by self-interest in entirety, but that is not the case.
Yunus claims that capitalism has various options but the current economic system only focuses on one option which is making money and it is even extreme because it encourages profit maximization as the best way of human survival. In addition to conventional business, Yunus proposes social business as an ideal way of solving people’s problems. When Borstein challenges Yunus that his idea sounds idealistic, the interviewee gives examples of business people who have approached him to create social businesses (Bornstein, 2017). Yunus believes that removing the personal profit motive from business opens a window of seeing other many possibilities which transform the whole economy. The interviewee goes on to propose numerous sources of funding for social businesses and major ones include personal wealth and Charity money. Yunus believes that youths are open to new ideas and they can be quite useful in the creation of social businesses. Lastly, Yunus confesses to the author that he is a happy man despite not owning any shares in the company and says that creating a lot of wealth at the expense of poor people does not satisfy anything but rather creating social businesses brings happiness (Bornstein, 2017).
This article by Bornstein criticizes the current capitalist economic system that favors only the rich as it does not unleash the entrepreneurial capacity of poor people. This assertion by Yunus is true to some extent because a close examination of the taxation system and wealth distribution in different countries makes poor people poorer.
Warning of wealth concentration by Yunus is valid, and it is important to take hid from it. The fact that eight people own more wealth than the bottom 50 percent of world’s population is appalling (Bornstein, 2017). Probably this is the reason why the income gap between poor people and the rich keeps widening every day. Yunus’ argument that current capitalist system sucks wealth upwardly is valid because a capitalist is only concerned about profit maximization. For-profit to be maximized, expenses must be reduced at all costs. In the process of cost reduction, poor people suffer most through salary cuts because they are the employees of the owners of the factors of production. Furthermore, taxation policies are made by the rich and most of the times they enact tax policies that favor their businesses at the expense of the poor In (Henneberg, 2017).
Yunus argues that wealth mushroom that is ever growing is quite dangerous to politics and it destroys the society since concentrating wealth among some few individuals implies that power is also concentrated in some few people. The majority who live at the bottom get angered which sometimes results in revolutionary activities that are not good for the economy. In the article, a couple of examples where wealth mushrooming has negatively affected countries are given which enough proves that current capitalism is not good.
The author’s argument that the idea of social business is idealistic rather than realistic is misleading. Times have changed, and right now most corporations are aligning their business strategies with the corporate social responsibility meaning that management of these companies is not just concerned with profits (Information Resources Management Association, 2017). The example of McCain Foods partnership with Grameen to establish social businesses is enough evidence that the idea of creating social businesses to solve human problems is salable. Integration of teaching social business is schools as proposed by Yunus is brilliant, and it will help in solving many capitalism problems faced by people in the society.
In conclusion, Yunus provides some insightful information about the negative impact of capitalism. Throughout the article, he gives empirical evidence as a back up to his claims of having social businesses as a solution to the problem of poverty. Facts about wealth concentration among some few people are confirmed by the ever-increasing income disparity between the rich and the poor.
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Bornstein, D. (2017). Opinion | Giving Capitalism a Social Conscience. Nytimes.com. Retrieved 19 November 2017, from https://www.nytimes.com/2017/10/10/opinion/giving-capitalism-a-social-conscience.html
In Henneberg, S. (2017). The wealth gap.
In Sanchez-Barrios, L. J., & In Gomez-Nunez, L. (2017). Evolving entrepreneurial strategies for self-sustainability in vulnerable American communities.
Information Resources Management Association. (2017). Business education and ethics: Concepts, methodologies, tools, and applications. Hershey, PA: Business Science Reference.
Mukhopadhaya, P., Shantakumar, G., & Rao, B. (2013). Economic Growth and Income Inequality in China, India, and Singapore: Trends and Policy Implications (Vol. 93). Routledge.