This month a radical thinker passed through Westminster and presented an idea that politicians tackling Britain’s economic crisis should sit up and take notice.
Nobel Peace prizewinner Muhammad Yunus was addressing a Commonwealth Parliamentary Association conference on growth and development en route from Bangla Desh to Mexico City. The conference attracted people from as far apart as Somalia and Paraguay and Haiti and Timor-Leste.
Yunus is the man who created an anti-bank bank called the Grameen Bank in Bangla Desh which broke every rule of traditional banking. As he put it : ” I went and talked to the banks and did precisely the opposite of everything they told me.”
His bank was only interested in lending money to the poorest in Bangla Desh – those with nothing so they could start tiny micro businesses. His ideas have now been taken up in developed economies notable the United States in New York and elsewhere.
He has been criticised however by people who say it is still exploitative and has not worked, The idea has been hijacked by others as this review suggests.
But his bank is extraordinary. he employs no lawyers, has no detailed contracts, and lends to people with no collatoral and yet 99 per cent of the small loans are repaid. Bad news for Price Waterhouse and City lawyers as well as banks.
I was particularly struck by one phrase he tells the unemployed in Bangla Desh to say. ” I am not a job seeker. I am a job creator. I want to start at the top not be exploited at the bottom.”
Now it occurs to me that this might have a lot of resonance to Britain post the crash. Capitalism and bankers are brilliant at helping the haves have even more so they can exploit the have-nots, What about turning the idea on its head and help the have-nots for once.
Britain is rapidly becoming a more unequal society in wealth and jobs. Constituencies near to me like Hemel Hempstead face a job feast this Christmas with Amazon and Royal Mail competing against each other to fill vacancies. Constituencies like Birmingham, Ladywood and Foyle in Northern Ireland face a job famine with over 11 per cent still out of work.
It also strikes me that among the wasted talent on the dole they must be people capable of learning skills, particularly in the child or personal caring professions, but can’t get going because they haven’t basic qualifications or access to a few hundred readies to get started. This is why Jobcentre plus in pushing them into low paid work, zero hour contracts, to become the new exploited of companies funded by wealthy private equity groups.
Now if a politician decided that instead he was going to find a way to connect with the dispossessed by setting up a bank only interested in funding them to create their own job – this might have more resonance in the real world than in the current Metropolitan elite.
Traditionally this idea sits with Labour – the party created by trade unions, that believes in social credit organisations rather than Wonga and backs the ideals of the Co-operative movement. But it could equally apply to the Greens and some strands in other parties
What better way to reconnect to the working class than allow him and her to get cash to buy equipment so they can earn some money, even get a second-hand white van. A veritable Job Creator Allowance.
What about the money for this? Why not use the huge fines on corrupt banks to kick start the scheme rather than as sticking plaster for the NHS (Labour) or tax cuts (Tory)? What is a more delicious idea than taking money from bloated, arrogant money manipulators and giving it to the very people they wouldn’t give house room?
How would it work? I don’t know but I now know a man who does. He is called Muhammed Yunus. Someone should call him up and put the idea in their party manifesto. He did speak after all in the Attlee Room, named after one of Britain’s greatest reforming Prime Ministers.
The bankers should be jailed, not fined. And I wonder if the bank Yunus runs creates money from thin air when presented with a signature on an agreement as the others do. It would be interesting to know. That 99% success rate, even if only approximated, means anyone with a banking license, funded or not, could make this concept work pretty much anywhere money is used to trade.
Reblogged this on sdbast.
Forwarded this to Yunus’ close friend, Shafi Chowdhury, David.
I valued and scanned his chapter – attached.
Has above the banksters have got away with it.In fact we know they still taking high bonuses but then loaning someone who has any money. Would have our banksters committing Mati Hari. Yep. but then there are honest people who will take that chance with one who hasn’t any money. Yet its shown that those that do pay back but don’t expect our fraudulent banksters to take this up. jeff3
You were doing really well in this article, as per usual. Until you included that comment about unemployed and low-waged people needing to ‘learn skills’. I have a doctorate in political science, which I got after getting a prizewinning first-class degree. I’m also a good enough musician to survive by busking my own music. My writing (non-fiction, fiction and poetry) is published on an occasional basis. I’ve happily worked as a builder’s labourer. Really, I’m hardly short of skills. And I am homeless.
My situation is by no means unique.
So what’s the problem? One part of it is the mindset that attempts to make us all into ‘entrepreneurs’ on our own behalf, instead of simply creating jobs. Without Brian Epstein to play the role of ‘entrepreneur’, the Beatles would have remained a merely band famous throughout Merseyside. Jimi without Chas Chandler would have been stuck at the Cafe Wah! Yes, those musicians got ripped off. But the bands from the eighties onwards that have controlled their own revenues closely have not been as good – because they’re doing accounts instead of writing music. The innovative writers of the twentieth century, similarly, were published by companies founded by entrepreneurs – which freed them from having to be ‘entrepreneurs’ themselves. A classic example of this was the Left Book Club, which kept socialist writers in work (and being read) without forcing them to invest their time in the accounts side. Moving on from ‘creative’ work to industrial work, economies of scale are still important in most industries. Small entrepreneurs make small money, because the big money comes from careful planning.
Another is the idea that investment is lacking. It isn’t. It just happens that the investments being made are overwhelmingly in finance. Bankers are investing in banking. Or, to be more precise, speculating on speculation. Whereas actual business investment by banks and government is run on astonishingly short-term and risk-averse bases – Will Hutton’s 1990s writing deals well with this in conventional political-economic terms. But he never looked at the role of credit-checking (open discrimination against the poorest), uneven fraud enforcement (locking up the poor and negotiating with the rich), the failure to enforce legally-instituted taxes (even if governments have made agreements to forgive certain taxes, they can renege on those agreements. Indeed, any politician seeking instant popularity could start screaming for the heads of the civil servants who’ve helped major tax evaders. And by tearing up the agreements they made in front of a camera).
A third – dealt with at length by Piketty and those who are following him in declaring the growth of inequality since the 1980s as the defining economic problem of our time – is that the rich are taking directly from the poor. Not just in investment, but in housing. This will become even more marked if the poorest can’t earn because of illnesses the NHS can’t afford to treat, or continue to be liable for tax on their accommodation despite not owning it.
Fourth. This may be decisive in my personal situation (and those thousands of other highly-skilled people who are regularly insulted by others presuming they need to reskill). I am not socially connected to powerful people who want to help me. And I am not going to ‘network’, brown-nose, lie or obfuscate (as is required for fast-track promotion in most social science), deliberately do bad work, or ‘volunteer’ in order to get on the ladder. In an age dominated by ex-public schoolboys and their flunkies, I’m staying on my feet rather than getting down on my knees. Even if it means wearing cheap shoes.
Sure, loans to the poorest might be a nice thing. On one level. But it’s an easy and unambitious radicalism that’s eventually predicated on turning us all into businessmen. Why insult a carer, or a plumber, or a driver, or a writer, shop assistant, a radical economist, or a nurse, guitarist or paleoclimatologist, by insisting that they become an ‘entrepreneur’? The money is there – by taxing top incomes and property ownership – to simply give them jobs. For what they can already do. And then nobody would care about whether ‘99% of it comes back’.
I’m not a ‘jobseeker’. I’m not a ‘job creator’. I’m not someone who has to be told – by anyone -what to say I am. I’m worth every bit as much as those at the top, and some more, just like most working-class people. And the last thing we need, whether we’re from Bangladesh or Bangor, is more debt.
Re nosuchthingasthemarket you make a number of pretty pertinent points. First there are many people with a lot of skills who can’t get jobs, but there are also some who haven’t all the necessary skills to do what they want to do.
Yes,there is no reason why everybody need to be an entrepreneur. But I have noticed quite a number of people who want to be able to set up their own services – often in personal care – but just can’t do it because of the extortionate charges by banks and they don’t have any money themselves so aren’t a ” good ” risk! They end up being exploited by big companies swet up to make profits out of these services.
Finally you are right about taxation – if we want a properly funded services we are going to have pay higher taxes. The trouble is we have hardly a single politician who will admit this for fear of driving away voters.
We could fund public services with local currencies. Currencies could be created for just that purpose. Local currencies wouldn’t go floating off into tax havens, they’d stay around. Or, we could use national money which reduces in value with time – I forget the term for this 😦 – as in this week this note’s worth ten pounds, next week it’s worth nine pounds etc, to encourage spending and not hoarding. The last payment, the one where it reduces to nothing, could be used for local taxes, ie, that’s the only way you could spend a note which had reduced in value that much. There’s ways of doing these things, we just aren’t familiar with them. The TINA narrative, the one we have routinely rammed down our throats, is an entirely false one designed to protect the bankers and, to a large extent, the status quo in this country.
What a man ,he has knowledge compassion and a business acumen, I pay my sincere thanks to someone like him, do you think the present pocket liners running our country will take one bit of notice. My sincere thanks for David for writing this article more need to read it.
The simple fact is that if we got the huge multinationals to pay tax on what they earn in this country, you know, the coffee shops and phone companies, banks and other financial service institutions, that we could halt the decline of the NHS and save it from privatisation, we could also greatly reduce the tax burden on the poor and working class. the greatest saving however would come from cutting the huge sums spent on bulls**ting the public that government spend.
The current system is ENTIRELY set up for the banking and monied elite, not for those that actually produce the wealth. People need to remember why Unions had to be set up in the first place. Our forefathers must be spinning in their graves with anger at how we have frittered away their legacy. Some days I’m ashamed to say I’m British because I don’t have the power to show these charlatans up for who they really are, and whilst I have the knowledge not to be a sheep, I don’t have the money or influence to be a wolf. In the election next year we need to remember that whoever is elected, the state is still in power. Cameron and Blair and Thatcher et al were just puppets for the “Big Pharma, Military Industrial Complex and now the Yanks are taking everything over we are surely doomed. I could weep for my children and their children, for the many coming generations will surely pay for our spineless inaction.
Robert Owen started a campaign to have people work no more than 8 hours per day. His slogan was “Eight hours labour, eight hours recreation, eight hours rest.”
Sounds fair to me. 🙂
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Reblogged this on markcatlin3695's Blog.
Reblogged this on TheCritique Archives and commented:
Excellent demonstration of how much easier it is to invest sensibly in the bottom ‘rung’ of society, without making any serious losses, than the neoliberal ‘theorists’ want us to imagine.
Another good move would be for Governments to stop throwing tax-cuts at businesses and the rich in the speculative hope of ‘cajoling’ them into hiring more staff, and instead introduce tax-cuts that are *conditional* on them hiring more staff.
They aren’t trying to encourage firms to hire, they’re creating a two-tier society of oligarchs and serfs. This will continue till we stop it.
Well said Bill 🙂
Reblogged this on amnesiaclinic and commented:
What is a more delicious idea than taking money from bloated, arrogant money manipulators and giving it to the very people they wouldn’t give house room?
Unfortunately such schemes have been created and hijacked. A local councillor received £50,000 grant to set up a publishing business – presumably to employ other staff. So far as I can see he employs his wife. He then sought another grant – in his wife’s name – to upgrade the bathroom of a holiday cottage on the East Coast, from the Council in which he sits as a councillor. Claiming the holiday cottage was used for charitable holidays for local disadvantaged people. This was early April 2012. When police were presented with evidence that the 3 quotes for work on the bathroom showed links/collusion between all 3 quotes they refused to take the statements for a month. Meanwhile they arrested the local blogger who gave evidence to the police and arrested him in 1st May 2012 – all known associates and friends of the local councillor complaining of harassment. That case was later dropped by the CPS. Eventually on 8 May 2012 I was asked to sign a statement that bore no relation to the paper I’d originally typed and given to Police about the grant being sought from the local council. I was threatened with arrest if I did not sign, so signed their statement but added ‘Signed under duress’. This was on 8 May 2012. I also added an addendum calling into question the bloggers coincidental arrest at the same time as we’d reported the attempted fraud. The case was divided into 2 parts one went to the Acting Chief Constable to look at my addendum and the fraud allegation to a junior officer. Having successfully divided the case in two both the councillor and his chums were found not to have colluded and the councillor not to have been involved UN fraud. Grants are liberally dispersed to the ‘worthy poor’ who are then exonerated from any malpractice no matter what the evidence.