Sharing: Muhammad Yunus
Posted on March 12, 2008
Since the fall of the Soviet Union in 1991, free markets have swept the globe. Free-market economics has taken root in China, Southeast Asia, much of South America, Eastern Europe, and even the former Soviet Union. There are many things that free markets do extraordinarily well. When we look at countries with long histories under capitalist systems—in Western Europe and North America—we see evidence of great wealth. We also see remarkable technological innovation, scientific discovery, and educational and social progress. The emergence of modern capitalism three hundred years ago made possible material progress of a kind never before seen. Today, however—almost a generation after the Soviet Union fell—a sense of disillusionment is setting in.Â
To be sure, capitalism is thriving. Businesses continue to grow, global trade is booming, multinational corporations are spreading into markets in the developing world, and technological advancements continue to multiply.
But not everyone is benefiting. Global income distribution tells the story: Ninety-four percent of world income goes to 40 percent of the people, while the other 60 percent live on only 6 percent of the world income. Half of the world lives on two dollars a day or less, while almost a billion people live on less than one dollar a day.
Poverty is not distributed evenly around the world; specific regions suffer its worst effects. In sub-Saharan Africa, South Asia, and Latin America, hundreds of millions of poor people struggle for survival. Periodic disasters, such as the 2004 tsunami that devastated regions on the Indian Ocean, continue to kill hundreds of thousands of poor and vulnerable people.
The divide between the global North and South—between the world’s richest and the rest—has widened.
Even in the United States, with its reputation as the richest country on earth, social progress has been disappointing. After two decades of slow progress, the number of people living in poverty has increased in recent years. Some forty-seven million people, nearly a sixth of the population, have no health insurance and have trouble getting basic medical care. After the end of the Cold War, many hoped for a “peace dividend.” Defense spending could decline, and social programs for education and medical care would increase. But today the U.S. government has focused on military action and security measures, ignoring the poor.
What is wrong? In a world where the ideology of free enterprise has no real challenger, why have free markets failed so many people? As some nations march toward ever greater prosperity, why has so much of the world been left behind? The reason is simple. Unfettered markets in their current form are not meant to solve social problems and instead may actually exacerbate poverty, disease, pollution, corruption, crime and inequality.
I support the idea of globalization—that free markets should expand beyond national borders, allowing trade among nations and a continuing flow of capital. I also believe in governments wooing international companies by offering them business facilities, operating conveniences, and tax and regulatory advantages. Globalization, as a general business principle, can bring more benefits to the poor than any alternative. But without proper oversight and guidelines, globalization has the potential to be highly destructive.
Global trade is like a hundred-lane highway criss-crossing the world, If it is a free-for-all highway, with no stoplights, speed limits, size restrictions, or even lane markers, its surface will be taken over by the giant trucks run from the world’s most powerful economies. Small vehicles—a farmer’s pickup truck or Bangladesh’s bullock carts and human-powered rickshaws—will be forced off the highway.
In order to have win-win globalization, we must have fair traffic laws, traffic signals, and traffic police. The rule of “the strongest takes all” must be replaced by rules that ensure that the poorest have a place on the highway. Otherwise the global free market falls under the control of financial imperialism.
From: “Creating a World Without Poverty” by Nobel Peace Prize winner Muhammad Yunus.
Available in bookstores everywhere.
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His idea seems to be all wrong. Globalizing will not help solving the problem of poverty. Inventing new ways of living, new ways of thinking and above all that accepting that politics which are based on market management are wrong. Which means that all the politicial theories are wrong. It is no time anymore to try to recycle old thoughts, it is time to have ideas and quick.
the problem is not the free market. As the article said free markets make technological growth and economic growth advance very quickly. The Poverty problem comes from the government not using its power to protect the rights of every individual. If you examine Europe where Democratic freedom has flourished with things like, Gun control, Regulated markets, Universal health care, Free Public university’s you see that poverty levels are extremely low, violent crime is very small and that over all people are just more happy. The Government of the United States needs to establish more Compassionate social and socioeconomic policy’s that look out for people in poverty and minority’s and that overall help all people. Free markets do have flaws because in capitalism its all making profits. So many corporations exploit there workers by not letting them unionize *cough* walmart *cough*. Often they even exploit the environment or even innocent animals to increase profits. But if the government were to regulate business more sensibly by protecting workers the environment and animals we would have a much happy world with more democratic freedom over all. Not just democratic freedom for the white guy who’s dad can pay for him to go to college, But for everyone.
I agree with Yunus because a big part of the poverty problem is lack of access to capital funding to start a business. Big government and lots of schools is not the solution. There is a will to work out there in a lot of poor people who could do things for themselves if they were only loaned the money. The problem is multinational banks are either restricted to lend into certain 3rd World countries or they are afraid of the credit risk in unproven borrowers.
Yunus has a success rate that speaks for itself. The free market can work if the little guy is given the chance.
Yes, my conservative Republican friend, we agree. The little guy must be given a chance. The solution to this doesn’t have to be government. If private entities are willing to step up and do their social share, great good can be done by the private sector.