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The Reason for Poverty

Updated on January 9, 2010

Capitalism and All its Friends

As substantiated by Karl Marx, communism is a poison which threatens the existence of mankind.  Throughout the centuries, a constant battle has been raging throughout all of Europe, Asia, Africa and the Americas.  This battle, in essence, has completely consumed the thoughts and minds of every living human on the face of the Earth.  “What,” you might ask, “is this great battle that I have never heard of?”  This silent war, in fact, is the struggle between the Bourgeoisie class and the Proletariat class. 

Marx, in his belief of the eternal battle between the Bourgeoisie and Proletariat classes, explains that if capitalism is to continue, the differences between each class will eventually spread apart so far, and be so radically different, that unless a change by the Proletarian class is made, the Bourgeoisie will rule in social, political and economic dominance.

 Here is one of the millions of staggering statistics: 94% of the world income goes to 40% of the people, while the other 60% must live on only 6% of world income, meaning that almost one billion people live on less than a dollar a day.

 One reason for this statistic is the aspect of innovative design.  Because of the Bourgeoisie’s willingness to dominate those around both above and below, new methods of design, business infrastructure and working methods are created in order to keep the Proletariats just sophisticated enough to accomplish meaningless tasks while also staying not sophisticated enough to rise through the social classes.

While this may seem like an appeal to the philosophy of communism, it is, in fact, not.  The reason that communism is the rule and not the exception in this case is because the theory of communism works to support a world built upon companionship and prosperity.  “But look at the examples made by those rulers of China and Russia.  Are they not enough to demonstrate the incapacity of communism to produce fair and benevolent leaders?”  The hard and simple answer to this question is a resounding no.

So what might the solution be?

The answer to this question does not include:

  • Non-profit organizations
  • Increased governmental involvement or
  • The reorganization of the economic structure

 The answer to this question is the birth of social business, their institution into a separate stock market, and wide spread access to the world market.

Social Business

So what exactly is “Social Business”?  Social business is defined as: business targeted towards the elimination of social issues through the standard methods practiced by regular capitalistic PMBs (profit-maximizing businesses).

Innovated by the 2006 Nobel Peace Prize winner Muhammad Yunus, this concept focuses on the ability to not give away goods to the impoverished, but to give them a financial advantage within the economic market in order to make headway within their own social and financial environments.

One example today which demonstrates the capacity of social business is that of Grameen Danone, a yogurt company based out of Bangladesh, one of the world’s most impoverished nations.  Struck by two terrible floods within the past decades, torn by political strife and struggle, and with one of the densest populations in the world, Bangladesh faces issues within every aspect of their nation.

In order to combat the issue of widespread hunger, Mr. Yunus started the social business Grameen Danone in order to distribute nutritional yogurt at subsidized prices to those without a substantial income. By over-pricing in better off areas, and under-pricing in more rural and financially strained environments, Yunus has been able to set Bangladesh on track for the World Nation’s goal of eliminating half the nation’s poverty by 2015.

Unfortunately, while effective, this method is both financially and time consuming. Businesses like Grameen Danone take months or years to determine the hundreds of aspect that must be determined in order to successfully maintain existence within cut-throat markets. Luckily, Muhammad Yunus also has an answer to this. The concept is that of a social stock market, designed specifically for those businesses which aim to profit from world issues while also helping the situation.

Within this concept, investors would focus their money within a social business.  Unlike a capitalistic PMB, the investors would not receive their money back.  Instead, the investor would merely receive the honor of being involved with the betterment of humanity.  By investing in these companies, unlike non-profit organizations, this money would go to the benefit of helping to make social businesses increase their range of products and services, while also working to develop the industries into self-sustaining entities.


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    • AdsenseStrategies profile image

      AdsenseStrategies 7 years ago from CONTACT ME at

      I was just reading about the collaboration of Danone and Grameen only yesterday. I support social business concepts, to be sure, but I do not think that Yunus rules out other possible solutions to poverty alongside social business, micro-credit, etc.

      An attitude of "do what works" and not of pre-judging various approaches is probably the wisest. See for example Paul Polak's approach to poverty... fascinating, and perhaps fodder for a future hub ;-) .

      Anyway, glad you are bringing attention to a fantastic new movement, that has already, and will continue to, transform millions of lives

    • The Revelationist profile image

      The Revelationist 7 years ago

      The beauty of social business is that it factors in the competitive aspect of human nature. Social business is nothing like that of nonprofit organizations; it works to make itself self-sustaining while also competing with other PMBs for sponsorship and business.

    • A M Werner profile image

      Allen Werner 7 years ago from West Allis

      One missing element from every business model created is man's greed is always strong enough that it only takes one fool with a big gun, to tell everyone else who gets what. No system actually works because in the end, those with the power to take, will circumvent and take, legally or illegally. Survival of the strongest exists deep in the fabric of all business. As far as population control goes, I've always believed in the story of the fishes & the loaves - there is always enough to go around. Some just want more than their fair share. Peace.

    • The Revelationist profile image

      The Revelationist 7 years ago

      Hey Springboard,

      In Muhammad Yunus's book, Banker to the Poor, it can be seen that the people work very hard to contribute to their households. It is not the circumstance where there is a non-profit organization giving out foods, supplies and money to the people, and they aren't trying to work. In terms of the entire world, I have no idea, but as one of the most impoverished nations in the world, I believe that Bangladesh is a prime example of how people react to poverty.

    • Springboard profile image

      Springboard 7 years ago from Wisconsin

      I would say that what is missing from the study is of the population that lives on the smaller percentage of income, how many of those people contribute to their own circumstances?

      I have never made a lot of money. I do not have a college degree. Yet I have a sizeable portfolio of stock and other investments. I own real estate both for income as well as own my own house. I am secure financially.

      Poverty can, at times, be self inflicted when individuals determine for themselves that they cannot acheive, and take on no risk to acheieve.

      Of course, I am speaking primarily on developed countries like the US where individuals can participate in free markets and have the availablity of options such as education, books, and whatever else a person can utilize to improve their own personal situations.

    • dabeaner profile image

      dabeaner 7 years ago from Nibiru

      Interesting idea.

      However, it will fail because of per capita resource availability due to excess population. That is Bangladesh's main problem, as well as that of many other countries, even the U.S.

      "Whatever your cause, it is a lost cause without population control."