Muhammad Yunus is my new hero. I realise that I was somewhat disparaging about him in a post that I wrote on the failure of Microcredit (Poor People Think Differently) – and I still think that some of what he says is a bit, well, optimistic. But then I listened to his lecture Banker to the Poor: Lifting Millions Out Of Poverty Through Social Business.

What He Has To Say About Unemployment

So Mr Yunus has a pretty awesome narrative that led to the establishment of Grameen Bank and the Nobel Peace Price. The summarised version:

  1. Muhammad Yunus saw, in his village, how the poor were stuck paying exhorbitant interest rates to loan sharks.
  2. So he started lending to the poor out of his own pocket – which he could do, because they didn’t need to borrow huge amounts ($2, $5, etc – low enough that he could afford to take the risk of default with relative ease).
  3. Despite the conventional wisdom of the high default risk of the poor, he experienced near zero default rates in practice. That is: everyone that borrowed from him paid him back.
  4. So he tried to persuade his local bank to get in on the action.
  5. But they refused.
  6. After months of argument, he eventually got them to lend him the money in his personal capacity, and he then on-lent it to the poor women of Bangladesh.
  7. This worked well, until the bank decided that they were lending him too much money.
  8. Which he thought was crazy, given the proven credit history.
  9. So he started his own bank (Grameen Bank).

But this is not the end of the story – and I’m not referring to any Nobel Peace Prizes. Businesses that are founded on a clear social principle generally tend to multiply into other spheres of social need. What happened next:

  1. Grameen bank treats their borrowers as though they’re part of a large family (as I explained in the Poor People Think Differently post).
  2. So the bank started offering to help educate the children of the poor women of Bangladesh – strengthening the relationship between the bank and the borrower (and thereby lowering default risk even further), as well as investing in a future customer base.
  3. The initial intention (as Mr Yunus tells it) was to help them get at least a primary school level of education – so that they could read and write.
  4. But it was so successful that many of these children went on to high school, and then got into universities and graduated as doctors, lawyers, accountants, etc.

And you might think that was the end of this success story.

Only, these newly-graduated rags-to-not-quite-yet-riches kids returned home to their parents. And began to lament their inability to find jobs in this difficult economy.

Sound familiar?

The Yunus Response

Dear Newly-Educated Children of the Poor Mothers of Bangladesh

Unemployment is an artificial fiction. 

Do you ever look at animals and think “my goodness, that animal is unemployed?” No. No you do not. 

And if you ever do think that an animal looks unemployed, then I tell you this: that animal belongs to a human.

What is this “unemployment” you speak of? You are skilled. You are creative. Go and be useful. 

Create jobs, don’t search for them.



At which point, the children asked “how?” because they weren’t taught how, and because that sounded rather risky.

To which, he responded:

Dear Newly-Educated-But-Increasingly-Tiresome Children of the Poor Mothers of Bangladesh

Here is what I have in mind.

Your mother is a member of this bank. She is an entrepreneur that spent sleepless nights worrying about taking her first $30 loan from this bank: about whether she could pay it back, and whether she could live with the risk. In some cases, she now borrows up to $15,000 at a time.

She has many many years of experience in being entrepreneurial.

Go and learn from her. Then use your skills to grow her business.

Be a job creator.



Sometimes, I look at countries with high unemployment rates, and I wonder whether there is not a disconnect. The foundational premise of economic thought is unlimited wants coupled with limited resources. The unemployed are a vast resource. Are we saying that the resource is useless? Because then we’ve solved the fundamental economic problem! Too much resource with too little want…

But that is surely not the case. Because the need for a job is driven by the need to eat/drink/clothe in order to survive. Much like energy, economic need operates within a closed system. Each life carries within it the seed of its own sustainable economic purpose. You eat to work and you work to eat.

Once we accept that premise, then the balance is just a question of what one is willing to work for.

The Strawberry Pickers of Greece

I dislike picking on the Greeks, but given the 60% unemployment rate of Greek youth, it is the place to look when discussing unemployment.

Strawberries in Greece, and fruit in general, are not picked by young Greeks. Most of those jobs belong to immigrants. In a country with 60% youth unemployment.

Why though?


Here’s a blog post on the topic.

The general answer seems to be that the task is too menial. Or it’s beneath one’s pay-grade. Or beneath one’s qualifications. Or foreign workers will work for less than minimum wage (even though that doesn’t seem to be the case by some calculations…). Make of that what you will.

Is Unemployment Really Circumstantial?

Here is my real point: on what basis do we think society is somehow obligated to find a use for the skills we have elected to gain? That is irrational. We have an obligation to gain skills for which society will have a use.

And we are all useful. Just maybe not as useful as we might like to believe ourselves (especially if we’ve gained the wrong skills).

So is it then possible that, for the physically and mentally able, unemployment is not an unfortunate circumstance, but a choice?