We could have talked more (or even the whole show) about the ideas of Mohammad Yunus. His book, Creating A World Without Poverty, argues we should look beyond standard for-profit business and consider expanding the emphasis on “social business.” This – among other things – preserves investors’ capital but doesn’t aim to make it grow, while serving pressing social needs with a business-like delivery model.
Versions of these ideas came up repeatedly in a course I just finished running at MIT, with Anjali Sastry and other colleagues, in which more than 50 students put their business skills to work helping health care projects in Africa become more effective. Muhammad is definitely right that more and more business people want to get involved in this kind of social space, and many social entrepreneurs welcome input/advice/any kind of serious contribution.
Ordinarily, we might dismiss a zero real rate of return as uninteresting to anyone who has other uses for their money – but Muhammad is quite eloquent on how such an investment is complementary to seeing more in your life and in finding ways to really help others.
In addition, presumably this part of your portfolio would be pretty stable and largely uncorrelated with other investments. Perhaps, in the light of recent events, we should all consider having part of our longer-term savings in a “preservation of capital” category of assets. This is not the usual ambition that the finance industry encourages, but it may become part of sensible diversification – particularly if it enables you to help others in measurable, productive ways (and Muhammad is big on measurement and assessment of success, while recognizing it is hard in this sphere). Perhaps it even provides us with a “parachute” of perspectives, network connections, and resources that are available if our regular careers go off-track?
Actually, I didn’t get to say many other things also – in this kind of format, you have to answer the questions (pretty much) as asked and go with the flow of the conversation. Feel free to tell me what points I missed; even better if you have a succinct phrasing I can use for any future interviews.
And thanks for all the useful input that you provided in the run up to Friday evening.
The Overtime segment of the show – recording immediately after the TV broadcast – is on the web (currently here, but that’s not a permalink; update: permalink). For the show itself you need HBO, which will have it on-demand until July 5th.
By Simon Johnson