Conversation with the author on FDL Book Saloon

May 28, 2008

Christy Hardin Smith compiled a live conversation with the author on ‘Creating a world without poverty’ in FDL Book Saloon:

[Please join me in welcoming Muhammad Yunus, founder of the Grameen Bank and winner of the 2006 Nobel Peace Prize. Please stay on topic on the comments and be polite. Off-topic conversations should be taken to the prior thread. Thank you! — CHS]

A child does not select the family into which he or she is born. Some are born into families of comfort, some to great wealth, but some to families who struggle every single day with poverty. The child doesn’t ask for this as a start in life — to be so far behind where so many others have begun. And each time we turn away from this, thinking that it isn’t our problem or that it is just the way things are, we potentially sentence that child to an endless cycle of poverty for all the generations that follow.

One fifth of the world’s people — 1.3 billion people worldwide (YouTube) — subsist on less than $1 a day, according to Grameen Foundation figures. Living on less than the change rattling around in your pocket or your purse today, most likely. But what if the key to solving the crushing problem of poverty is something as simple as investment and capital expenses designed to benefit the communities that need them most?

In his latest book, Creating A World Without Poverty, Nobel Peace Prize winner Muhammad Yunus proposes a new paradigm for economic business models that takes the concept of charity forward into a self-sustaining, beneficial commercial enterprise whose purpose is not monetary profit so much as enabling those currently living in poverty to lift themselves up onto their own feet. From his book:

…if you spend enough time living among the poor, you discover that their poverty arises from the fact that they cannot retain the genuine results of their labor. And the reason for this is clear: They have no control over capital. The poor work for the benefit of someone else who controls the capital. It may be moneylenders like those who exploited the poor people of Jobra, where I began my work. It may be landlords, factory owners, or agents who recruit poor people for work under conditions of near-slavery. What they have in common is the ability to steal the productive labor of the poor for their own benefit.

And why is this the case? Because the poor do not inherit any capital, nor does anyone in the conventional system provide them with access to capital or credit. The world has been made to believe that the poor are not credit-worthy. I’ve become convinced that changing this assumption is the necessary first step to relieving the poverty problem.

…Giving the poor credit and letting them enjoy the fruits of their labor — often for the first time in their lives — helps to create a situation in which they may start feeling the need for training, begin looking for it…[t]hese are conditions in which training can be truly meaningful and effective.

The repayment rate at the Grameen Bank is 98.6%. This is far higher than the usual rate of repayment in traditional, secured credit loans. And that extraordinary repayment level comes from a number of factors, including the social structure that Grameen puts into place for borrowers which gives them a network of community support as they push forward with a business idea or improvement in their lives. When people believe in themselves and their abilities, and have the courage to take that leap toward something better, the potential can be limitless given an opportunity to prove themselves.

When you have worked with the poor in any profession, you begin to see several constants, the most crushing of which is the hopelessness of people who must struggle daily to simply put food on their tables and a roof over their head. Some measure of respect, for themselves or from someone else, can make such an enormous difference in terms of perspective and hope.

A social business is something that can tangibly benefit an entire community, whether through affordable health care where there was none before or early childhood nutrition for the vulnerable, or any number of potential business concepts which target a fundamental community need and lift up the lives of the poor from desperate and destitute to lives with a little more hope. A social business is a hybrid of sorts between a charity and a capitalist business, run not simply to give a hand-out, but more to give a hand up through providing a good or service that is a benefit, but also creating community jobs. Again, from his book:

…when you invest in a social business, you get your money back and retain the ownership of a company that supports itself through earned income. So individual contributions, especially from affluent people who want to help improve the world, will be a major source of funding of social business.

As can be endowments and other foundations who look to maximize the return on their donations. This goes beyond the concept of social entrepreneurship, where a social benefit is part of the draw for a traditional profit maximizing company (such as an organic farm or a solar panel company, as examples) where the primary goal of the social business is to better the community. When you think about the potential areas for a social business applications in a community, the possibilities are endless.

However, the laws under which businesses operate will need to be modified in most places to allow for this type of social investment: instead of shareholder profit maximization, the goal of a social business is to maximize community benefit while earning just enough to sustain the enterprise with perhaps a little extra to work toward future goals of additional benefit in the community.

This is a revolutionary construct in terms of potential benefits. It attempts to replace the usual paradigm of charity donations for which there was no return other than good works.

In a social business, because it is based on a commercially viable model (albeit one in which profit maximization is not the foremost concern), the initial investment capital is returned to be used again and again in other potential social ventures. I find this fascinating in its limitless potential, and yet question how viable this might be under current conditions in the richer nations of the world, and given so much indifference toward the plight of the poorest peoples among us. There is a tension between human nature and our better natures, and it is a big question in my mind as to which will win out.

But all it can take is one dream. And someone willing to take that to the public in a plea for something better…for all of us.

Muhammad Yunus has taken that even further by making it possible for so many of the poor to make their own dreams a reality through microcredit. With the next wave of social business, this may go further still…to Create A World Without Poverty. And, with that, I welcome Muhammad Yunus and your questions and comments.

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144 Responses to “FDL Book Salon: Creating A World Without Poverty”
Raven January 19th, 2008 at 3:02 pm 1
Welcome sir.

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Laura Doty January 19th, 2008 at 3:02 pm 2
Professor Yunus, Thank you so very much for being here today. I admire your work tremendously.

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sammifredenburg January 19th, 2008 at 3:02 pm 3
i am new here, how do i join the chat? (first day)

thanx.

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BevW January 19th, 2008 at 3:03 pm 4
Mr Yunus welcome to the Lake.

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eCAHNomics January 19th, 2008 at 3:03 pm 5
Welcome Dr. Yunus. I like the idea of using business practices to alleviate poverty.

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dakine01 January 19th, 2008 at 3:03 pm 6
Welcome to FDL sir. And congratulations on your Nobel prize!

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eCAHNomics January 19th, 2008 at 3:04 pm 7
Dr. Yunus, I have read about half of your book and have plenty of Qs. If any of those that I ask are answered in the part of the book I haven’t read yet, just let me know.

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Christy Hardin Smith January 19th, 2008 at 3:04 pm 8
Thanks you so much for being here today Prof. Yunus. We are honored to have you speak about your latest book.

I was intrigued by the installment of IT kiosks in villages all over Bangladesh. I see this as such a substantial connection point for so many in the developing world, and as a jumping off point for so many self-started business and educational opportunities. How is that effort faring at this point?

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Christy Hardin Smith January 19th, 2008 at 3:05 pm 9
In response to sammifredenburg @ 3
sammi — All you have to do is type in a question and/or comment and submit. Just join in the conversation the way you already have. Thanks!

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Yunus January 19th, 2008 at 3:05 pm 10
In response to Laura Doty @ 2
thank you.

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sammifredenburg January 19th, 2008 at 3:06 pm 11
Ah, okay. Dr. Yunus, i saw you last night at the University of Washington, you signed a book for me, and thank you for your work. my husband supports me in my work for extreme poverty and hunger, and last night he was extremely inspired and impressed with your optimism and has curled up to your book. thank you for that.

sammi in seattle

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Yunus January 19th, 2008 at 3:06 pm 12
In response to BevW @ 4
I am delighted top be here.

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Yunus January 19th, 2008 at 3:07 pm 13
In response to dakine01 @ 6
Thanks. Delighted that you joined in for a conversation.

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kirk murphy January 19th, 2008 at 3:07 pm 14
Dr Yunus, welcome to the Lake. Thanks for joining us and for your work.

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Yunus January 19th, 2008 at 3:08 pm 15
In response to eCAHNomics @ 7
That is the whole purpose of the bopok — to generate questions and discussions. Thanks.

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eCAHNomics January 19th, 2008 at 3:09 pm 16
My most general Q is how do the other actors in the microcredit & other Grameen businesses react when Grameen shows up? For example, how do the previous lenders, charging usurous rates, respond when their borrowers shift over to Grameen? How do husbands react to their wives’ empowerment? How did the local mishti doi producers react when Grameen-Danone showed up? And ditto for all your other enterprises. Your competition is at an economic disadvantage, as they must generate profits and your social businesses do not. Any resentlment?

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Millineryman January 19th, 2008 at 3:09 pm 17
Professor Yunus you are true inspiration. Personally I hope to learn by your example. Thank you for being here today.

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Christy Hardin Smith January 19th, 2008 at 3:09 pm 18
btw, all, the YouTube linked above in the post is a video produced by the Grameen Foundation discussing the beneficial impact that microcredit loans have had in developing nations worldwide. It’s a wonderful introductory piece.

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Yunus January 19th, 2008 at 3:10 pm 19
In response to sammifredenburg @ 11
Thank you and your husband for comimg to the lecture. Thanks for your work with the poor.

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Christy Hardin Smith January 19th, 2008 at 3:11 pm 20
In response to eCAHNomics @ 16
Great questions — I’ve been wondering the answers to those myself…

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kiddo January 19th, 2008 at 3:11 pm 21
As teachers, the wife and I view education as the key to lifting our kids out of the clutches of poorness. We are weary of hearing this tired old false maxim that ‘just throwing more money at our public schools solves nothing’.

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Yunus January 19th, 2008 at 3:11 pm 22
In response to eCAHNomics @ 16
These a

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sammifredenburg January 19th, 2008 at 3:13 pm 23
sir, i have a question about the popular KIVA movement here in the west. where folks develop a one-on-one loan that is satisfied and repaid, often to be applied to another. many large orgs like World Vision that embrace this sort of one on one have general budgets for the overhead and keeping up with the sponsored, and KIVA claims 100% goes to the borrower, unless by grant or somehow i can’t see the maintenance of this sort of program, am i missing something? also, when a request for $100 is made in a foreign extreme poverty land, by the time $100 is raised in the west, the dollar or pound fluxuates, let alone it seems it would have to be transferred thru a banking system and charged a fee accordingly. am i missing something? a savings and loan like Grameen or the one thru CARE seems more accountable. please let me know if i am off base here.

thanx,

sammi

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eCAHNomics January 19th, 2008 at 3:14 pm 24
On p. 52, you say that 64% of borrowers cross the poverty line within 5 years. What about the other 36%? Do some cross it later, and do some never cross it, and if not, why?

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Christy Hardin Smith January 19th, 2008 at 3:14 pm 25
I saw today that the USAToday book reviewer gave this book an excellent review. I’m sure Dr. Yunus has likely heard this, but I thought I’d mention it for everyone else. If you haven’t read the book as yet, it truly is a thought provoking and inspirational read — makes you stretch your mind around an entirely new paradigm for business and charitable practice.

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dakine01 January 19th, 2008 at 3:15 pm 26
Prof Yunus,
I am still fairly early in your book but a couple of things really have jumped out at me already.

One is how the Grameen bank “Loan Officers” operate. I got a strong sense that it is similar in many ways to how small town banks in the US once operated – where the banker would often make a loan based on knowledge of the lendee’s character as much as knowledge of the loan purpose.

I wish sometimes we could return to actually being able to evaluate folks by knowing their character once again.

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Yunus January 19th, 2008 at 3:15 pm 27
In response to eCAHNomics @ 16
Too many questions to answer them all. Generally speaking you handle the problems as you go along. One shoukld not expect a problem journey when you are doing something which was never done before. But the happy news is one can always find solutions.

Clarification: Soc Bus does generate profit, but it does not go to the owners because owners already agreed not to take any profit. This profit stays with the company.

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Yunus January 19th, 2008 at 3:16 pm 28
In response to Millineryman @ 17
It is a pleasure to be here and be in conversation with you.

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Jane Hamsher January 19th, 2008 at 3:16 pm 29
Dr. Yunus, thanks so much for being here. Don’t worry about answering all the questions, we welcome whatever you have the time for.

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Jane Hamsher January 19th, 2008 at 3:18 pm 30
In response to Yunus @ 27
It is very heartening that you have been able to engage partners who are willing to operate under such a business model.

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Yunus January 19th, 2008 at 3:19 pm 31
In response to Christy Hardin Smith @ 25
Thanks Christy, I did not know about this review. I’ll look it up.

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Christy Hardin Smith January 19th, 2008 at 3:20 pm 32
One of the things in this book that struck m so much was the discussion about teaching the woman who was getting a loan how to write her own name, and how empowering that single act could be for her. That spark is so important, and the raising of her respect for herself in doing this was enormous. It was a lovely part of the book — thanks so much for including that.

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emptywheel January 19th, 2008 at 3:20 pm 33
Dr. Yunus, thanks for joining us at FDL. I’m about halfway through your book so far and find it extremely readable and fascinating.

I used to spend a lot of time working with US auto companies in Asia, particularly China. Traveling in China gave me a whole new appreciation for the way capital can bring people out of poverty. But when I imagined what US car companies envision–the hope to sell a car to every “middle class” family in China, about 300 million people, it became clear how unsustainable the consumption driven mode of growth will be.

Can you talk about the sustainability of microcredit? It seems that, in addition to finding ways to address poverty, we need to find a way to bring people out of poverty in a sustainable way. It seems that microcredit may well offer many advantages in sustainability, because it puts money into needs, disperses money into rural areas, and focuses on intangible investments like education.

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kirk murphy January 19th, 2008 at 3:21 pm 34
Dr. Yunus, my inner enviro loves your suggestion

“I think it is time to consider limiting the freedom of the individual nation to consume or wate natural resources.”

Here in the US – where around 4% of the world’s people consume 20% of the planet’s annual petroleum demand – consumer demand accounts for 70% of our economy. Subtracting out needed expenditures for (fairly made and priced) food, clothing, and shelter, we seem to have a lot of collective opportunity to cut resource use…just as the mainstream lending flows appear to be dwindling.

Could you elaborate here on the ideas in your book regarding how social business may play a role in decoupling America’s people from the (needless) consumption foisted upon them by PMBs?

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Siun January 19th, 2008 at 3:21 pm 35
Professor Yunus – this is such an honor to have you join us here. Your work has inspired so many. Thank you.

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eCAHNomics January 19th, 2008 at 3:21 pm 36
You mention that Bangladesh is a living laboratory for innovative programs in poverty reduction. And the proverty reduction statistics you cite are impressive. What is it about Bangladesh that explains such a good outcome? Are there other countries that are also attacking poverty creatively?

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SanderO January 19th, 2008 at 3:23 pm 37
Lifting people from poverty is indeed a laudable goal. But what happens to these little entrepreneurs as they become solvent.. do they jump on the “capitalist” band wagon and do the “exploitation” thing which ultimately is one of the causes of poverty… the extraction of profit from labor?

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sammifredenburg January 19th, 2008 at 3:23 pm 38
last night after the lecture, i came home to a game of Monopoly with my 16 year old son. after he wiped me out finacially and i was completely mortgaged to pay landing on his hotel on the Boardwalk, i was able to relate the drop the debt campaign and even request a microcredit loan from him, and he spent a while parusing your book. we get parent/child teaching moments however they come!

=)

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kiddo January 19th, 2008 at 3:27 pm 39
I know I might be rather simple but for me when a country (the U.S) “invests” $15,000,000,000 per month on war (with no return on that investment), while at the same constantly cutting taxes, I have no problem understanding why there is so much poverty in the “richest” nation on earth. And I certainly don’t have any difficulty grasping the reasons for poorness in other countries, say for example ‘banana republics’.

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kiddo January 19th, 2008 at 3:28 pm 40
How about a cap on personal income? How about a redistribution of wealth?

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Siun January 19th, 2008 at 3:29 pm 41
So many questions already – I’ll just “listen” for a bit but I am enjoying the book so much … and hope lots of folks read it and think of the world in new ways.

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Scarecrow January 19th, 2008 at 3:29 pm 42
It’s an honor to have you here, Prof. Yunus. I’m curious about how you see the relationship between your microlending efforts and much larger scale foreign aid. Do you see your model as a superior to the latter, a complement to it, a necessity as a result of the fall off in foreign aid? Where does it fit in?

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Yunus January 19th, 2008 at 3:31 pm 43
In response to eCAHNomics @ 24
64 percent of the borrowers who have been with Grameen Bank for five years or more have crossed the poverty line. Others hopefully will crorss the line later. Those who are with Grameen for six years, but not crossed the line yet may cross it at seventh year or eighth year or later. Just because they have not succeeded yet, does not mean that they will not succeed later.

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LoriSaltveit January 19th, 2008 at 3:33 pm 44
Dr. Yunus – Thank you for your time today and for the wonderful work that you’ve done. I am about half way through your book and am always interested in reading more about how to help in the creating a world without poverty. Like many here on this forum I have read Jeffrey Sachs book The End of Poverty and found that it resonated well with me.

I have heard about The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good by William Easterly? It is supposed to have excellent ideas for affecting lasting change while partnering with the poor to fight against poverty but also slams many of Sachs ideas. Have you read Easterly’s book? If yes, can you provide a review in a few sentences? Thank you.

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Yunus January 19th, 2008 at 3:33 pm 45
In response to Christy Hardin Smith @ 32
I am glad you liked it. There many features of Grameen I wish I could include in the book, but the limitation of space did not allow me to do it. I am glad you noticed this particular feature.

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looseheadprop January 19th, 2008 at 3:33 pm 46
Prof. Yunus. I noticed that many of your solutions deliberately choose to use a model that does not require being part of a large infra structure. For example the use of solar panels for stores off the grid. The location of small yogurt factories close to where both the milk supple and the consumer were.

Do you think these techniques can and should cross over into the the more developed economies to provide sustainable growth, or would such a thing be unfeasible in a major city like NY?

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looseheadprop January 19th, 2008 at 3:36 pm 47
Also, I noticed the word “rural” appeared many times in your book. What percent of it’’s micro lending and other businesses are directed towards the urban poor.

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Yunus January 19th, 2008 at 3:36 pm 48
In response to emptywheel @ 33
I agree with you completely. Poor are the ones who use resources most effciently. They use resuorces to the maximum benefiot, they recycle everything that can be recycled, including what is thrown away as waste by others.

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Yunus January 19th, 2008 at 3:38 pm 49
In response to kirk murphy @ 34
Challenge to soc bus is to show alternative products, services leading to susta

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kiddo January 19th, 2008 at 3:39 pm 50
I would like to see a sort of world wide WPA type of set up for funding new micro-credit startup business’s for the poor to combat global warming.

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Laura Doty January 19th, 2008 at 3:39 pm 51
I appreciate your observations about “the need to consider limiting the freedom of individual nations to consume or waste natural resources.” We cannot all run social businesses, but we all can limit our consumption of goods and resources, and demand that our governments do what they can to conserve the resources of the world. One imagines there might fewer wars, too…

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eCAHNomics January 19th, 2008 at 3:40 pm 52
In response to LoriSaltveit @ 44
One thing stressed both by Dr. Yunus & Easterly is consulting with the recipients of the programs to figure out what they need & what are good ways of delivering it. Yunus started this from actual contact with the poor people, but I think Easterly comes to the same conclusion mainly from an intellectual approach.

Such an apporach is anathema to the World Bank, that thinks it knows everything and dictates no only what the intended recipients should do, but also what the national government should do.

Needless to say, the World Bank programs seldom achieve the desired objective.

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kiddo January 19th, 2008 at 3:41 pm 53
Some argue that multi-nationals control the planet and keep much of the world’s population poor. If that is true, how do we deal with that?

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kiddo January 19th, 2008 at 3:42 pm 54
And what do we need to think, if anything, about the WTO?

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SanderO January 19th, 2008 at 3:43 pm 55
As needs are met and people rise out of poverty they develop wants and that’s where the concept of consumerism begins to destroy sustainability. Capitalists are the masters of creating wants in people to the extent that they sell credit to allow people to consume (buy). It’s the addiction to and abuse of credit that destroys sustainable lives and economies ultimately.

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sammifredenburg January 19th, 2008 at 3:43 pm 56
Dr. Yunus, monday night at Seattle ONE a young man who just came back from Guatamala working with the Esparanza microcredit project will be speaking, he was at the lecture last night. so if your ears are burning, we will be speaking of you . . . . =) are you familiar with this organization, or of Ingrid Munro’s Jamii Borra microcredit lending in Kenya, where the recently deadly unrest has affected many of her borrowers? and how if so we can assist her?

thanx,

sammi

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Yunus January 19th, 2008 at 3:44 pm 57
In response to kirk murphy @ 34
Challenge to soc bus is to show alternative products, services leading to sustainable lifestyle. If we put our mind into it we can find them, popularise them. People are willing to have a life style which is sustainable, if they are presented with them. But PMBs keep driving them in the other direction by continuous skillful attractive campaigns. It is time that we give people sustainable options through SBs.

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bgrothus January 19th, 2008 at 3:46 pm 58
Are there any political or business leaders in the US who have been in contact with you? Do any of them embrace your ideas?

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Yunus January 19th, 2008 at 3:46 pm 59
In response to SanderO @ 37
Exploitation becomes difficult when everybody has equal access to opportunities. Unevenness of power which makes exploitation easy.

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SanderO January 19th, 2008 at 3:47 pm 60
Large lending is targeted at huge projects such as electrification grids, roads infrastructure and so forth. While some of this creates jobs in the short term it does nothing for building sustainable economies. Large infrastructure projects work when the underlying economy requires them, where people have jobs and income and so forth. Teaching someone to fish, they will never be hungry… but teaching them to use a tractor will make them a slave to a petrol company.

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eCAHNomics January 19th, 2008 at 3:47 pm 61
In response to bgrothus @ 58
There’s a photo of him & Hillary, and the caption reads that she’s been interested in his work since she was First Lady of Arkansas.

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Yunus January 19th, 2008 at 3:48 pm 62
In response to Siun @ 35
Thanks. Let us join hands to do the things we believe in. It can be really powerful.

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Audrey January 19th, 2008 at 3:49 pm 63
In response to Yunus @ 43
I suspect there are other measures of success besides crossing the poverty line. Like autonomy and community standing. Some may take longer to cross the line due to varying obligations like family size, etc. Just supposing here.

Thank you so much for being here today, Dr.

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Siun January 19th, 2008 at 3:49 pm 64
To me, perhaps the biggest lesson of Prof Yunus’ work is that we can and should learn from people around the world better ways of creating sustainability rather than assuming the west can impose some “solutions” which seem to benefit us rather than those we claim to “help.”

I see many people in the business world becoming more interested in this through the Grameen example and also the work of C K Prahalad.

We have so much to learn – and to unlearn from our own culture.

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onefishtwofish January 19th, 2008 at 3:49 pm 65
Dr Yunus, Thank you for your work.

1. Can you give examples of places or situations where microlending has FAILED? (I’ll let you define failure — perhaps the lending organization has gone under, the level of poverty has not changed, or perhaps something else.) If so, what went wrong? Examples inside and outside the Gameen Bank are OK.

2. Looking at microlending worldwide, are there different formulas for success in different areas, regions, nations, or cultures?

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SanderO January 19th, 2008 at 3:49 pm 66
In response to Yunus @ 59
Dr Yunus, this is the macro problem of capitalism and pyramidal power structures… resides in the hands of the few. Capitalism is not compatible with democracy… is it?

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Laura Doty January 19th, 2008 at 3:50 pm 67
The 16 Decisions you mention in your book Banker to the Poor are such a beautiful outline for living an upright, productive life, and that, if followed, build community. I wonder if these principles aren’t a great help in encouraging folks to continue on a path that helps others, not just themselves. Could you talk a little about them?

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kiddo January 19th, 2008 at 3:52 pm 68
How about this idea. The Iraq oil fields are nationalized and the sole owners of the all oil beneath their sands are ALL the people of Iraq. Same deal with the all the bananas in Central America.

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Audrey January 19th, 2008 at 3:52 pm 69
In response to eCAHNomics @ 61
There’s a photo of him & Hillary, and the caption reads that she’s been interested in his work since she was First Lady of Arkansas.

AND the economy is her strength.

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eCAHNomics January 19th, 2008 at 3:53 pm 70
I was surprised both at your advocating a SAFTA and your desire to have a Bangladesh megaport built by a social business.

On a potential SAFTA, does the bad outcome of NAFTA, especially for the Mexican economy & their farmers (and Bangladesh would be the Mexico analogue in SAFTA), but also for U.S. workers give you any second thoughts?

On the megaport, wouldn’t building it have to be coordinated with vast improvements in feeder roads and railroads, otherwise the port would be useless? And isn’t a confluence of such huge projects better coordinated under government than by either social business or for-profit business?

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kirk murphy January 19th, 2008 at 3:54 pm 71
Thank you for your answer, Dr. Yunus.

I take hope from the vast resources (ads/media) the PMB’s find they must expend simply to create (the illusion of) demand for their latest junk.

The PMB’s huge media costs seem like a possible tactical advantage for social business (which merely need to meet existing real needs, not create spurious ones).

Ending tax subsidies for the PMB’s media budgets (Curently deducted as “business expense”) would be a lovely political means to further encourage the change to a sustainable economy – but I’m not hoping to see the US do that in 2008.

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hearthmoon January 19th, 2008 at 3:54 pm 72
I appreciate what you say about not anticipating problems, but I still wonder about one thing. In the United States, what often happens when there is a viable local economy with thriving Mom and Pop businesses, is that a mega-chain will come in and drive out the small businesses with predatory practices too varied to mention here. This drives wages down and puts people out of work, not destroying the local economy but creating more poverty. If say, a local bicycle factory gets started (maybe that’s not the kind of business you would support, but using this as an example), what would keep a capitalist chain from coming in once the local economy got established with a retail chain that drove the original company out of business?

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Yunus January 19th, 2008 at 3:54 pm 73
In response to kiddo @ 40
Putting a cap on personal income will not be a good policy. tax it appropriately, give incentive to create SBs, etc. If anybody is creating income he is helping the economy and the society. But make sure he does it transparently.

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kiddo January 19th, 2008 at 3:54 pm 74
Does the DLC endorse this concept?

My biggest question is how does one go about overcoming the concept of greed that so permeates the world?

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looseheadprop January 19th, 2008 at 3:55 pm 75
Also, I was struck by the social engineering quality of the “16 Decisions” pledge that you aslk your borrowers to take, such as keeping their houses in good repair, taking care of their children’s health and their own health, limiting the size of the family.

How have the MEN responded to this empowerement of their wives and daughters? has their been pushback? have these changes shifted the culural paradigm in Bengal?

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kiddo January 19th, 2008 at 3:56 pm 76
In response to Yunus @ 73
Isn’t putting a cap on income and heavily taxing income at the higher brakets, the same thing?

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sammifredenburg January 19th, 2008 at 3:58 pm 77
Dr. Yunus, when you were in seattle and led us in the Stand Up Against Poverty, i heard for the first time of a, i believe, “pilot” microlending program of yours in brooklyn neighborhood in new york city. is that going well?

sammi

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GorillasGuides January 19th, 2008 at 3:58 pm 78
In response to kiddo @ 76
No, taxing is always at a margin. Capping is a ne plus ultra.

Dubhaltach

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Yunus January 19th, 2008 at 4:00 pm 79
In response to looseheadprop @ 46
Stand-alone solutions can work in any situation if you can find one. They are best because it does not require too much co-ordination and synchronization, avoids bureaucratic delays and inefficiency. It has to be decided case by case weighing the alternatives and appropriateness.

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sadlyyes January 19th, 2008 at 4:00 pm 80
In response to Yunus @ 43
Your optimism,and big heart are so inspiring,when there is so much greed around.thank you for that HOPE

Reply
Yunus January 19th, 2008 at 4:03 pm 81
In response to Laura Doty @ 51
I agree. But, all of us may not “run” SBs but we can invest in SB’s if Social Stock Market is created.

Reply
kiddo January 19th, 2008 at 4:04 pm 82
In response to GorillasGuides @ 78
Technically (or perhaps semantically) that is correct. But if you tax at a certain level, it amounts to the same thing as a cap. But I am not discussing semantics here. I’m talking bottom line.

Reply
sammifredenburg January 19th, 2008 at 4:05 pm 83
The Social Stock Market you spoke of is brilliant, thank you for that idea!

Reply
Yunus January 19th, 2008 at 4:05 pm 84
In response to kiddo @ 53
Why can’t we think of creating Social Multi-national companies to combat PMB multinationals?

Reply
Laura Doty January 19th, 2008 at 4:05 pm 85
In response to Yunus @ 81
You betcha, and I’m ready to sign up!

Reply
Mommybrain January 19th, 2008 at 4:06 pm 86
Is it possible for individuals to invest (make deposits) into Grameen Bank?

Reply
Yunus January 19th, 2008 at 4:09 pm 87
In response to onefishtwofish @ 65
I am sure there are many microcredit initiatives which failed, or did not do well. The reason is always the initiators did not know how to run the business. It was definitely not the fault of the borrowers.

Reply
eCAHNomics January 19th, 2008 at 4:10 pm 88
In response to kiddo @ 82
Only if the marginal tax rate is 100%. The highest the highest income tax bracket has ever been in the U.S. is 90% & most think that was confiscatory. Remember, there’s that pesky old constitutional amendment about the government seizing your property.

Don’t know of any other cuntries that have a 100% marginal tax rate either.

Reply
kiddo January 19th, 2008 at 4:10 pm 89
In response to Yunus @ 84
I think we can certainly think about it.

Reply
sadlyyes January 19th, 2008 at 4:11 pm 90
Un checked Capitalism in this country,leading to predatory lending is hurting the most vulnerable in this country.Iv e always thought lenders should WORK with their clients,not play gotcha

Reply
GorillasGuides January 19th, 2008 at 4:11 pm 91
In response to kiddo @ 82
I am not talking semantics I am taking about how tax systems work which is that they are at a marginal rate. A capping system is very different in that you may not earn above X and that anything you earn over that amount will be taken away. The two are very different.

Reply
emptywheel January 19th, 2008 at 4:15 pm 92
I’d love to hear you say more about the assumptions, in traditional banking, about collateral. Folks tracking the mortgage crisis in this country are talking more and more about “jingle mail,” when borrowers just walk away from houses bc selling them would take more money on an upsideown loan than just losing their investment. For a variety of reasons, teh efforts for lenders to get rid of the collateral that supposedly guaranteed their loans is going to be devastating.

Do you think there’s an opportunity to change the cultural expectations, either here or elsewhere?

Reply
Yunus January 19th, 2008 at 4:18 pm 93
In response to eCAHNomics @ 70
Opening up market do create transitional problems, but if wisely managed these problems can be minimized. Ultimate gain for the trading nations is what should be the goal.

Megaport must be accomapanied by the a network of world-class highways crisscrossing the Bangladesh connecting the user countries without any interruption of flow of goods in both direction. Without toatl support of the government megaport cannot be built. Government can keep shares in the company, and seat in thr board.

Reply
SanderO January 19th, 2008 at 4:18 pm 94
What are the ethics of selling money for profit?…ie lending

Reply
kiddo January 19th, 2008 at 4:19 pm 95
In response to GorillasGuides @ 91
I understand how tax systems work. If you tax at a certain rate, it does limit or if you will, cap net income. I’m talking about bottom line or net result. Is capping income a limit on net wealth? Is taxing income on gross income a way that in effect, limits net wealth?

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eCAHNomics January 19th, 2008 at 4:21 pm 96
In response to emptywheel @ 92
collateral

I haven’t seen Dr. Yunus explicitly say it, but the “collateral” in mocroloans is human capital.

Human capital may be the best kind of collateral. There a millions of examples in leding on physical capital that have failed. Besides the current housing crisis, a couple of other noteworthy examples are lending on the inflated value of farm land (1970s?), lending to airlines to buy aircraft. In all of those cases, the time when the banks would want to use the collateral is precisely when it is in depression and many borrowers are defaulting. Thus the “collateral” becomes worthless.

Human capital much less likely to suffer such boom-bust cycles.

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Yunus January 19th, 2008 at 4:22 pm 97
In response to kiddo @ 74
No fault of the people. People are as much greedy as they are generous asacrificing.

Reply
kiddo January 19th, 2008 at 4:23 pm 98
You can talk economics all day and night. You can argue for Milton Friedman or you can discuss in favor of John Kenneth Galbraith. It’s all so very soft.

Reply
eCAHNomics January 19th, 2008 at 4:26 pm 99
In response to Yunus @ 93
Opening up market do create transitional problems, but if wisely managed these problems can be minimized.

I have yet to see any country anticipate transitional problems, nor react to correct them on a timely basis. It’s been over 13 years since NATFA and the problems persist & grow worse. I’m quite familiar with the textbook benefits of trade, but in practice, most trade agreements are pressured by the rich folks on the poor, to the benefit of the former.

Reply
Yunus January 19th, 2008 at 4:28 pm 100
In response to kiddo @ 74
No fault of the people. People are as much greedy as they are generous asacrificing. But the theory never allowed the sacricifing part of human being show up in businesss. So all we get in business is the greedy part of people. Theory must be be corrected and let the other part of people particiapate in the business world. Then we can see the real people in action. You are not greedy, I am not greedy, Iam sure others like us too. Theory has forced us all to adopt this only role that is of being greedy.

Reply
emptywheel January 19th, 2008 at 4:28 pm 101
In response to eCAHNomics @ 96
Great point. I hadn’t thought of it that way.

Reply
Scarecrow January 19th, 2008 at 4:28 pm 102
It appears that the success of the microcredit model has a lot to do with its focus on women — Can you discuss how that came about? Was that by design from the beginning or the result of experience?

Reply
kiddo January 19th, 2008 at 4:29 pm 103
In response to Yunus @ 97
Actually, my view is not that all people are as greedy as they are generous and sacrificing. The perception I hold is that in this country (the U.S.), the wealthy, and Republicans are far more greedy and less prone to sacrifice than most others.

Reply
sadlyyes January 19th, 2008 at 4:29 pm 104
In response to eCAHNomics @ 99
and because it benefits them,how can you nudge them to be fair,and improve the plight of others

Reply
Yunus January 19th, 2008 at 4:29 pm 105
In response to Laura Doty @ 85
Let’s do it. It is not as impossible as it looks.

Reply
sadlyyes January 19th, 2008 at 4:31 pm 106
In response to Yunus @ 105
i love your optimism,it is truly contaigous

Reply
eCAHNomics January 19th, 2008 at 4:31 pm 107
In response to sadlyyes @ 104
More & better Ds. *g*

Reply
sadlyyes January 19th, 2008 at 4:33 pm 108
In response to Yunus @ 100
Theory has forced us all to adopt this only role that is of being greedy.
————-
and the shallow consumer driven media

Reply
sadlyyes January 19th, 2008 at 4:33 pm 109
In response to eCAHNomics @ 107
yes…it truly benefits us all in the long term

Reply
GorillasGuides January 19th, 2008 at 4:34 pm 110
In response to kiddo @ 95
You are missing the point – if you tax at a marginal rate then there is no limit to the amount you can earn. It is simply that everything will be taxed at whtever tax rate applies. In a progressive system in an increasing proportion, in a flat rate system as the name implies at a fixed proportion.

A cap is utterly different a cap says anything you earn over X will be taken away.

High tax rates are not a disincentive to work or entrepreneurship in countries where people feel that they get value for money for the taxes they pay. I live in one.

Caps on the other hand are a disincentive.

Reply
Yunus January 19th, 2008 at 4:34 pm 111
In response to looseheadprop @ 75
I would say it has created a major impact. Empowerment of women in the last 25 years is dramatic. These decisions must have played some role in it. There is nothing against men in these decisions. Men and women all are behind them. There may be some initial hesitatiion on some issues, but ultimately all gathered around them

Reply
Scarecrow January 19th, 2008 at 4:35 pm 112
This may have been in Christy’s earlier review, but for those who wish to learn more, there is an excellent, lengthy interview of Prof. Yunus published last week in the Santa Barbara Independent.

Reply
Laura Doty January 19th, 2008 at 4:36 pm 113
The 16 Decisions is an antidote to the greed mentality.

Reply
sadlyyes January 19th, 2008 at 4:37 pm 114
empowerment is also contaigous,in a family, an empowered parent is a wonderful role model,for the next generation

Reply
kiddo January 19th, 2008 at 4:38 pm 115
When you work hard for not much money and without benefits, you tend to die earlier than those who are well off and have the associated benefits of wealth.

Reply
Yunus January 19th, 2008 at 4:41 pm 116
In response to sammifredenburg @ 77
Grameen America has just launched this program in Jackson Height, NY. Grameen America is owned and operated by Grameen Trust of Bangladesh as a social business. When this prototype proved successful it will be replicated in many States in the USA. It will address the problem of check-cashing, pay day loans, in addition to providing microcredit and receiving savings. Visit:www.grameenamerica.com, email: vidar@cbinet.com

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fontanka January 19th, 2008 at 4:42 pm 117
Dr. Yunus, Your work has inspired so many in the development field around the world. The microcredit model provided a simple, practical and measurable new way to foster development and offered an alternative approach to some many give-away wasteful and disempowering programs of the past. Now, new sources of money are entering the picture to fund micro-finance organizations in various locations. This money sees the healthy portfolios and potentially attractive and profitable investment vehicles. What is the risk for micro-finance organizations taking outside money? Can they protect from being infected with the ‘greed’ of the market? Should they stick to only non-commerical money?

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sadlyyes January 19th, 2008 at 4:43 pm 118
In response to kiddo @ 115
we are disposable,like our troops sadly…i feel healthcare,even a nurse practioner,is very important to help the entrepreneur/worker stay healthy,and working

Reply
sadlyyes January 19th, 2008 at 4:44 pm 119
In response to Yunus @ 116
Bravo…those payday loans are a disgrace!

Reply
kiddo January 19th, 2008 at 4:46 pm 120
In response to GorillasGuides @ 110
I am not missing your point. “Caps” are a caps. I knew what that meant many years before our discussion here.

The thought here is perhaps we will just have to disagree. I can live with it. And as to whether caps or taxes are or are not a disincentive to work, that in my view might best be left to the shrinks.

In any event, thanks for the lecture. Have a nice night. ;0)

Reply
Yunus January 19th, 2008 at 4:46 pm 121
In response to sadlyyes @ 108
We can create media company as a social business and let people give a chance.

Reply
GorillasGuides January 19th, 2008 at 4:47 pm 122
Dr Yunus’ link to Grameen America in clickable form

Reply
kiddo January 19th, 2008 at 4:48 pm 123
In response to sadlyyes @ 118
What you are saying is right. Education, health care, and food on the table are the building blocks for the world’s children to avoid poorness. ;0)

Reply
sadlyyes January 19th, 2008 at 4:49 pm 124
In response to Yunus @ 121
i love that! ,last night we were discussing here,how out of touch the media is,when their spokespeople are making upwards of 10,000,000 US$ per year….

Reply
bigbrother January 19th, 2008 at 4:51 pm 125
In response to Yunus @ 116
Hello Dr. Yanus:
In America a lot of the disadvantaged are homeless. It is increasing as housing cost rise steadily especially rental housing.
How would Grameen include the 50 million in America as a solution to homelessnes/hopelessness? Thank You.

Reply
kiddo January 19th, 2008 at 4:52 pm 126
Credit card interest rates, adjustable mortgage rates, auto trade in roll-overs and pay day advances used to be called loan sharking.

Reply
Siun January 19th, 2008 at 4:53 pm 127
In response to GorillasGuides @ 122
Thanks for adding the link!

Reply
fontanka January 19th, 2008 at 4:54 pm 128
In response to bigbrother @ 125
Good question. Habitat for Humanity tried and fought hard for major involvment in rebuilding of Gulf coast, only to be stymied by big money interests with other plans for redevelopment. There are groups doing such work, but they need to get around the machine.

Reply
kiddo January 19th, 2008 at 4:58 pm 129
And what about the homeless vets?

Reply
Yunus January 19th, 2008 at 4:58 pm 130
In response to emptywheel @ 92
This crisis only revealed that the banking system is not as scientifically designed as it gave the impression all along. It is a vulnerable structure. It is time to revisit the whole structural design and redesign it from the ground up to make it an inclusive system. We should take this as an opportunity to fix all the gaps it has left behind and made billions of people suffer because of their deliberate rejection.

Reply
Yunus January 19th, 2008 at 5:04 pm 131
In response to bigbrother @ 125
These are the issues we would like to address through Grameen America. We don’t have the prepared solutions yet. But we’ll keep trying to find the solutions with your participation. Let us work together on these issues. creativity of human mind can can find solution to any human problem. All we need to do is to keep trying for better and better solutions, and never to give up.

Reply
Yunus January 19th, 2008 at 5:05 pm 132
Thank you all for participating in this conversation. Yunus

Reply
BevW January 19th, 2008 at 5:05 pm 133
Dr Yunus thank you for coming to the Lake and sharing your book and thoughts.

Reply
SanderO January 19th, 2008 at 5:06 pm 134
In response to Yunus @ 130
Excellent point. Not very likely thought professor.

Reply
GorillasGuides January 19th, 2008 at 5:06 pm 135
In response to Siun @ 127
No problem 🙂

Reply
Laura Doty January 19th, 2008 at 5:08 pm 136
What a blessing that you were unable to persuade a bank to lend to the poor, Dr. Yunus. That failure led to many many successes. It’s a good lesson for us all, not to give up and to look for the creative, people-based solutions. Thank you so much for being here today. Best wishes to you.

Reply
sammifredenburg January 19th, 2008 at 5:11 pm 137
what an honor, Dr. Yunus. Seattle will be looking forward to seeing you again, hopefully soon. Bless your travels and may your book bea best-seller.

stay close,

sammi in seattle =)

Reply
brodix January 19th, 2008 at 5:15 pm 138
Since money is no longer gold based, but is taxpayer supported, it is functionally a form of public utility, just like a road system. Instead of transportation, it’s a system of economic exchange. While you are in total possession of the section of road you’re driving on, its value is due to it being connected to those everyone else is on. So is the value of the money in your pocket due to its broad interchangeability. It is not an issue of socializing wealth, but of understanding what money is to begin with. Your home, business, car, etc. are private property, but the roads linking them are not. Money is more like the public road system, than private property. It provides a broad economic connectivity, without which the economy could not function.
When the liquidity bubble does burst, faith in the concept of printed money will be shaken to its core. In order to restore faith in an invaluable economic tool, it would be useful to emphasize this public function.
Given that public debt is a major percentage of the total investment pool, it is public borrowing that serves to support the value of private wealth. This isn’t a stable political situation, because it eventually transfers ownership of public property to private ownership.

http://www.exterminatingangel……Itemid=118

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Siun January 19th, 2008 at 5:16 pm 139
Thank you so much Dr Yunus … your presence here has been a blessing and hopefully an inspiration as well.

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Siun January 19th, 2008 at 5:19 pm 140
Thanks also to the great new commenters who joined us today. Welcome to the Lake and please come back often and help us continue this conversation.

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bigbrother January 19th, 2008 at 5:28 pm 141
Dr. Yanus you are of course a brilliant mind. Your observation that the banking systems needs reinventing needed to be stated.
So many our western institutions are failing…insurance, healthcare retirement and banking structure are not meeting our needs…just a small segmant are served well.
Might some legislation assisting your bank model be useful?

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SanderO January 19th, 2008 at 5:32 pm 142
“Growth is bottom up, not top down, so capitalism is at its most vibrant when wealth is most evenly distributed. The problem with treating the economy like a game of Monopoly is that when one person controls everything, the game is over and you start again. In real life this stage is called revolution.”

Reply
Elliott January 19th, 2008 at 5:33 pm 143
Thank you Dr. Yunus, for everything…

Reply
GlennHurowitz January 20th, 2008 at 1:48 pm 144
What a great conversation.

By Christy Hardin Smith in Firedoglake
Published on January 19, 2008

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8 Responses to “Conversation with the author on FDL Book Saloon”


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