We westerners have a weakness for these spiritually inclined men of India. [or Bangladesh] – Smuts (Gandhi, 1982 film).
Muhammad Yunus Criticism, sorry, Accolades!
Not since Mahatma Gandhi has a South Asian received so much praise. Within a few years the Great Muhammad Yunus has received more awards than anyone else. From the Nobel Peace Prize to the US Presidential Medal of Freedom. Yes, even the prestigious Ho Chi Minh Award by the Ho Chi Minh City Peoples Committee.
Over 125 awards and counting from around the world. Click Here for a Wikipedia list of some of the awards. There is another long list of honorary degrees from universities, 48 and counting.
If these awards could be counted, Yunus probably has more awards than anyone in the world.
The entire world seems to love and respect the great Yunus. Very few have dared criticized his ideas. However, his ideas should be analyzed and criticized if necessary. Especially since they are economic in nature and concern the developing world. Yunus is most famous for Social Business and Micro-Finance. Yunus’ Nehru Jacket fashion will be spared.
Muhammad Yunus Criticism: Social Business
This will be a short section, since there’s already a page with criticism of the concept of Social Business. And a point by point criticism of a Yunus interview.
Basically anyone can claim to be a Social Business. Just claim to be solving a social problem and say you don’t take dividends. The Social Business label camouflages the profit seeking motive of a business by making it appear as a charity. A crypto-corporation. Read more on Social Business here.
Importantly, this isn’t a new concept. For centuries there have been ‘societies’ and cooperatives designed to solve social problems, while using business methods. Sometimes known as a Social Enterprise.
Muhammad Yunus Criticism: Micro-Finance & Micro-Lending
Again, Lending small amounts to poor people isn’t a new idea. Loan Sharks and Money Lenders have done this for centuries. Using both legal and illegal means, and at high rates of interest. Yunus merely repackaged an old idea in modern philanthropy. The high rates of interest remain.
Some studies have showed that micro loans to start businesses is a myth. Much of micro-lending simply fuels consumption smoothing. Others have pointed out that microfinance creates debt traps with coercive collection. Here are some further articles exposing the fantasy of micro lending:
- Sharma, Sudhirendar. “MFIs lay small-debt trap in Andhra”.
- Milford Bateman (2010-09-01). “The illusion of poverty reduction”. Red Pepper magazine.
- Kathrin Hartmann:”Erlösen kann uns nur der Tod” (“Only Death Can Save Us”), Frankfurter Rundschau, 30 August 2012
- Epstein, Keith (2007-12-13). ”Businessweek”, The Ugly Side of Microlending”. Businessweek.com. Retrieved 2011-03-25.
- “India’s micro-finance suicide epidemic”. BBC News. 2010-12-16.
Muhammad Yunus Criticism: Politics and the Government’s Allegations
Concerning his disputes with the Bangladesh government and Dhaka City. We will ignore those, since a 3rd world government is probably corrupt or politically motivated. Yunus probably should be given the benefit of the doubt in this case.
What Yunus Worship says about the World.
Yes, Yunus Worship. This is defined as excessive praise and accolades for someone who has done relatively little in the world. Everyone loves a simple homespun man talking about solving social problems. The idea of a banker helping the poor was also enticing. Yunus not only used the fad of corporate altruism, he became the fad.
Within a few years Yunus became an international celebrity, winning awards and speaking engagements. The media fawned over him. Politicians wanted to be seen with him. However a few academics decided to think with their own minds and do their own research. Especially concerning micro-finance, they exposed one of the biggest hypes in recent history.
A common theme in Social Business and Micro-Finance, is they aren’t new concepts. Yunus repackaged old ideas and sold them to an eager public willing to buy platitudes. The public (especially westerners) is eager for these save-the-world corporate fads. CSR, Micro-Finance, etc.
If, like Yunus you can sell this, you will be on top of the world. Altruism is profitable after all.