"The system was not built for families like mine to succeed, regardless of how hard my mum worked." This is a quote from the letter that Mr. Marcus Rashforrd has recently written to the MPs of the United Kingdom in response to a decision taken by the government to stop giving a £15-a-week free school meal voucher per child. Mr. Rashforrd is currently a football player in Manchester United and he is the youngest player to score a goal in the debut international match so far. By the term "the system", Mr. Rashforrd has meant the socio-economic system that we have in our societies.
Since, the publication of "The Theory of Moral Sentiments" and "An Inquiry into the Nature and Causes of the Wealth of Nations" by Adam Smith more than two hundred and fifty years ago, economies in the capitalist world follow the free market concept. Under this concept, it is considered that the invisible hand ensures the competition in the economies and guides economies through competition for scarce resources. It is believed that the whole society gets benefited when individuals try to maximise their own benefits. However, the extent of income and wealth inequalities that prevails in economies reflect that everybody in an economy does not get benefited equality by the system. Currently, the top one per cent of the world population owns more than fifty per cent of the total global wealth. The wealth is increasingly getting concentrated in the hands of only a few. It is happening due to the profit maximisation motive of businesses promoted by modern capitalism around the world. Professor Thomas Piketty in his book "Capital in the Twenty-First Century" argues that the return on capital, when it is greater than the economic growth rate, is the main source of inequality and wealth concentration.
In the capitalist system, it is assumed that everybody in the markets has equal access to information. Unfortunately, it does not happen. This non-availability of information equally to everybody in the markets is the main reason why markets do not work equally for everybody. In a recent book titled "People, Power, and Profits", Nobel Laureate Professor Joseph Stiglitz argues that markets give absolute power to individuals who have more information to exploit others who have less information. Consequently, it promotes selfishness at the individual level and makes businesses greedy. Due to these, the businesses do not bother to exploit others, adulterate food, and pollute our environment to maximise profitability. The pharmaceutical giant "The Gilead Sciences" is an example of such greediness and profit maximisation motive. In 2013, the Food and Drug Administration of the United States of America approved "Sovaldi", a medication used to treat hepatitis C. The Gilead Sciences set the price for a 12-week treatment course of Sovaldi at $84,000, amounting to $1,000 per pill. However, according to the researchers at Liverpool University, the actual production costs of Sovaldi for the 12-week course was in the range of $68-$136. In India, the generic item of "Sovaldi" in the name of "sofosbuvir" is currently available at $300 per treatment course. This example reflects how greedy businesses, especially big corporations, are.
In the context of profit maximisation and corporate greed induced inequality and of prevalent poverty, malnutrition, illiteracy, health care exclusion, unemployment, gender discrimination, and environmental degradation, Professor Muhammad Yunus has been promoting the "social business" concept for the last one decade. The main purpose of social businesses is to solve social problems that prevail in our societies. Under this concept, business owners are not allowed to take profit from their businesses. The earned profit remains with the business for ever for further investments in social causes. However, owners are allowed to take their capital back from social businesses and are also allowed to get incentives for their time and energy they spend on running businesses. The main motive of social businesses is not profit maximisation, rather it is social benefit maximisation. It does not mean that social businesses are not going to be profitable. The earning of profit is also important for social businesses for substantiality, but not at the cost of achieving social benefits.
Now, one might be curious to know, why entrepreneurs would be interested in starting social businesses in the absence of profit earnings. They would be interested in social businesses as it is going to enhance their happiness by solving social problems and making others happy. If it is our main objective to become happy in our lives, then making a profit or money is not everything. Making money or profit does not necessarily ensure happiness for us. Professor Robert Lane illustrates in his book "The Loss of Happiness in Market Democracies" that the correlation between income and happiness is close to zero in rich countries and it is negative sometimes. Therefore, it is important for us to make others happy through solving their problems to make us happier as Professor Keiko Otake and his colleagues assert that there is a "close association between kindness and happiness in everyday life".
According to Mr. Rushford, the system that exists in our societies is not working for everybody equally and it is failing many people, especially those, like the mother of Mr. Rushford, who are at the bottom of the distribution. For this reason, President Barak Obama has mentioned in a recent speech given to the graduating class of 2020 that the status quo is not working. He asserts that the old ways of doing things just do not work. Regarding making money and selfishness, he says, "it doesn't matter how much money you make if everyone around you is hungry and sick." Furthermore, echoing the arguments of Professor Yunus, he says "our society and our democracy only work when we think not just about ourselves, but about each other." Professor Yunus says "money-making is happiness, making others happy is super-happiness." Therefore, let us promote the concept of social business to ensure super-happiness for ourselves and to make this world livable for everybody.
Today is Professor Yunus's 80th birthday. I wish him a happy and healthy life.
Dr. M. Jahangir Alam Chowdhury is a Professor in the Department of Finance and the Executive Director of the Centre for Microfinance and Development at the University of Dhaka.