Muhammad Yunus: From Microcredit to a World Without Profit?

Muhammad Yunus: From Microcredit to a World Without Profit?

Muhammad Yunus, the Bangladeshi economist, godfather of microcredit, and founder of the now-famous Grameen Bank, enchants many different types of people with his imaginings of a better future. A popular public speaker, Yunus is a relatively short man with a silver mane, a beaming round face, and a perpetually optimistic demeanor. He seems humble even when making grandiose claims, and, with his warm-heartedness, makes whatever he has on offer seem delightfully agreeable. At his talks, he regularly draws standing ovations from socially conscious progressives, business-oriented free-marketers, and numerous personalities in between.

What Yunus has on offer, his supporters would say, is a method for ending poverty. These supporters make up a large group that includes the Norwegian committee that awarded Yunus and his Grameen Bank the 2006 Nobel Peace Prize. This makes things all the more frustrating for Yunus’s detractors. Those to the left would argue that the economist is selling “free market” neoliberalism in the guise of liberal do-gooderism. Right-wing libertarians, in contrast, contend that he is peddling communitarian snake oil in a business-friendly container.

Each position has some merit. And certainly the microcredit movement that he has spawned deserves careful and critical scrutiny. But Yunus himself, as a pitchman and a dreamer, may present something more interesting than either his backers or attackers typically acknowledge—something that may prove unexpectedly relevant in our future. That is, a precapitalist vision of a postcapitalist society.

Although the Grameen Bank is not the world’s first micro-lender, it is the most famous, and its story and Yunus’s have entered into the lore of the microcredit movement. Born in 1940, Yunus spent his late twenties studying in the United States on a Fulbright scholarship, earning a Ph.D. from Vanderbilt University. In June 1972, shortly after Bangladesh won its independence, he returned to his home country to take a position as a professor of economics at Chittagong University. He dreamed he would be part of building a resilient new nation. Then, in 1974, famine struck. Yunus watched emaciated people use their last strength to travel to the cities in search of help, then slump in the streets, resigned to die.

As a teacher and an economist, Yunus became determined to “abandon classical book learning,” as he writes in his memoir, Banker to the Poor, and instead apply his knowledge to directly addressing the problems of rural poverty. Immersing himself in village life, he became aware of a disturbing financial reality. He met a woman who, working in her mud-floored hut, spent her days making intricate bamboo baskets. They were beautiful, but the woman was never able to profit from her labor. Because she had no savings, she had to turn to a moneylender in order to buy her raw materials each day. By the time she paid him off, she had on...