The inventor of microlending explains why capitalism is broken

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His name is tied to the idea that social solidarity is an essential tool to fight the social and economic policies that are in the service of the concentration of wealth. Muhammad Yunus, winner of the Nobel Peace Prize in 2006 for his denouncing of social inequalities in the global economy and his proposal of offering microcredit to the poor, continues to argue for the thesis that mutual assistance among the poor can bring about a solution to social inequalities on the global level.

Yunus’ views are known all over the world. They have the advantage of a simplicity that is itself hard to achieve. For the Bengali economist, the unacceptable inequalities that characterize societies in the southern hemisphere of the planet are surmountable if there are institutions or individuals that would help men and women to pursue economic activities independent of those which are dominant on a large scale.

Over the years, Yunus has proposed microcredit initiatives to foster independent income-producing activities on a small scale. His proposals have gained widespread support from men and women in the global South. Ultimately, in his view, poverty could be easily tackled. All it would take was making credit available to the poor without a usurious interest rate. For this proposal, simple in its practical nature, the economic historian based in Bangladesh won the Nobel Peace Prize in 2006, thus becoming the symbol for a peaceful exit road from capitalism.

However, Muhammad Yunus has also been sharply criticized, both by the social movements that are critical towards the capitalist economy as well as by mainstream economists. While activists praised the ingenuity of his proposal, neoliberals have always seen Yunus’ microcredit as the classic inexpensive device that would ensure that nothing would change in the local and global balance of power.

Much has happened since 2008. Yunus has strengthened his non-governmental organization, building it up over time into one of the pilot projects for managing poverty on the global level. The bank he founded, the Grameen Bank, has become synonymous over the years with “ethical” financial practices aimed at furthering the global fight against poverty. Many people, men and women, have adopted the mechanism proposed by Yunus, managing to undertake entrepreneurial activities on a small scale. But many others have seen the Grameen Bank as the same type of rapacious capitalist finance reproduced on a small scale.

Muhammad Yunus has continued to carve out his own path. He wrote two books in which he illustrated his point of view (Banker to the Poor, and Creating a World without Poverty, both published by Feltrinelli). The proposals of the Sri Lankan economist have met with both approval and bitter disagreement.

The latest book by Muhammad Yunus (A World of Three Zeros, published in Italian by Feltrinelli) tries to identify viral paths out of capitalism. No radical conflict with the status quo is countenanced here. The planned path offered is of an impolitic testimony of otherness, or a viral spread of non-market cooperative experiences.

Our interview with Muhammad Yunus took place during the Italian tour to promote his book, recently published by Feltrinelli.

In your book, you dwell on the failure of capitalism. What do you mean by this “failure”?

The theorists of capitalism have always envisaged a society that guaranteed general well-being. It was not so in practice. The widespread poverty, growing social inequalities, and the concentration of wealth are showing that the idea of ​​a general welfare society was an illusion. We see manifested the phenomena of poverty and radical inequalities. We live in a world that can be likened to a time bomb, which can explode at any moment.

What is needed is a radical project of another way to imagine and develop social, economic and political relationships. Thus, the problem is that of redesigning capitalism. Men and women must therefore reconsider the current mode of production and the redistribution of wealth.

When I say that we are facing a time bomb that could explode at any moment, I do not want to cause panic, but merely to record the state of social relations in the world. Therefore, capitalism is what we have to rethink. If that involves actually overcoming it, I’m not sure, I myself would hold back from that.

On many occasions, you have supported the need for the growth of a social economy, distinct from the free market. Yet the civil and solidarity-based economy has to reckon with the fragility of being a mere subsistence economy. You have proposed individual microcredit and ethical finance to escape poverty. It is a solution that recalls the image of someone trying to empty out the ocean using a bucket.

I will answer this: what are we willing to sacrifice to defeat global poverty? I’m not a moralist. I am merely posing the question of how much we are willing to give up from our small or large privileges to combat poverty, rampant unemployment, etc. In my opinion, the choices we are making, the choices we are deciding upon, have a political and ethical meaning if they are aimed at rethinking and redesigning the mode of production of wealth and of its redistribution.

In your book, you dwell at length on the issue of mass unemployment. Your proposed solutions point to a world where we are all small business owners ourselves. There seems to be no escape from capitalism in what you are envisioning.

All of us, men and women, we are entrepreneurs in relation to ourselves. We have talent and creativity that is negated by the dominant production relationship. We must free ourselves from the constraints that relegate us to a subaltern role, dependent on those in power.

So, we need to win our freedom by becoming entrepreneurs of our own talent and creativity. Capitalism, in its dominant forms, prevents both the expression of the talent and the creativity of the individual. You hinted that my proposal for microcredit and widespread entrepreneurship is itself subordinate to capitalism. It may end up being so. But this is a risk that must be taken.

Your proposals run the risk of legitimizing the current situation, marked by a widespread subsistence economy and a concentration of wealth that encounters no actual opposition.

It is contemporary capitalism that produces a widespread subsistence economy. I think that wealth must be shared, that the dominant vertical model—a few dominant rich and many dominated poor—should be rethought and redesigned. I think it is important to rethink the models of wealth redistribution.

I am putting forward some proposals, but if there are others who are proposing other solutions, these are highly welcome. Microcredits and NGOs that are promoting proposals for the redistribution and sharing of wealth may well appear naive or inadequate in the ongoing conflict between the concentration of wealth and its redistribution—but this is still the main avenue to pursue.

Many are writing of a global conflict between the elite and the people. Is it really the case that populism is the proper political lexicon for a radical critique of the global elite?

Donald Trump, Brexit and the many other populist leaders are a symptom, a partial response, subordinate to the capitalist model. They are therefore reactive responses, one might say, to global and local issues, and rather than solving problems, they are radicalizing and “naturalizing” them. Not only are these not the solution, but they are part of the problem. They raise walls, feed fears, fuel hostility towards what is different and other.

Rather than fighting it, populism in fact bolsters contemporary capitalism. I will say again: the solution is the reappropriation of wealth, its redistribution and sharing.

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Originally published at https://ilmanifesto.it/la-ricchezza-perduta-del-talento/ on 2018-05-18