The Nobel Work of Muhammad Yunus and the Not So Noble Prize

Vinay Lal

[Published as “The Not-so-Noble Prize”, The Island (Sri Lanka), 25 October 2006. Also published in as “The Not So Noble Prize”, 23 October 2006, and in Asia Media on 30 October 2006]

With the announcement of the Nobel Peace Prize to Muhammad Yunus and the Grameen Bank, it appears that everyone has reason to celebrate. There is wide agreement that Yunus is fully deserving of the highest recognition: he launched the idea of ‘microcredit’, or the grant of very small loans to the destitute who are incapable of offering any collateral. This is a far-reaching idea, since loans are generally given by banks against collateral or assets, and the poor have traditionally been excluded precisely because of their inability to offer any surety. The Grameen Bank that Yunus founded over three decades ago has so far given out 6.6 million loans, averaging around $130 each, and it claims from its borrowers, who are overwhelmingly women, an astounding repayment rate of 98 percent. The Nobel Prize citation states, in justification of the award to Yunus, that ‘economic growth and political democracy cannot achieve their full potential unless the female half of humanity participates on an equal footing with the male’, and evidently Yunus has done much more than most others to empower women.

‘There is, thus, a proud nation: this is the first Nobel award conferred on a Bangladeshi, and for once Bangladesh has made the news — in the West, at least — for some reason other than a cyclone, a bomb attack, or the increasingly perilous state of its garment industry. Yunus will now be, in the terribly cliched language of our times, a ‘positive role model’ for Bangladeshis. The word has it that Bangladesh has been jolting with festivity, a celebration almost akin to the one experienced not so long ago when Bangladeshi cricketers, who are relative novices to the game, triumphed over the mighty Pakistani cricket team.

Apart from the recipients, who have every reason to feel jubilant, humanists, the advocates of the poor, and human rights campaigners must also feel satisfied at the outcome. The Norwegian Nobel Committee which awards the Peace Prize — the other prizes are all conferred by the Royal Swedish Academy of Sciences — has in recent years been taking a more expansive view of what constitutes noble work on behalf of ‘peace’, and with the award of the prize to Yunus this year the Committee has belatedly come around to the recognition that the attainment of peace is inextricably intertwined with the elimination of poverty. In the citation accompanying the award, the prize committee noted that ‘lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty.’

Even economists, one might say, have reason to be pleased about the Norwegian Nobel Committee’s decision. That phrase, ‘even economists’, should not be taken lightly, and to register its complexity one must begin with the observation that Muhammad Yunus is an economist by training and profession. He is also the first economist to be conferred the Peace Prize rather than the Prize, endowed by the Swedish Bank, in ‘Economic Sciences’. Any dividend of this kind must be a great boost to economists, who cannot be accused of any significant ethical, political, or professional investment in questions of peace, distributive justice, and equality. Let us recall that enduring description of economics as ‘the dismal science’ by the Victorian Thomas Carlyle, scarcely a cheerful man himself. By having persuaded themselves and everyone else that economics is comprised of universal truths which can be grasped, understood, and at least approximated by mathematical models, economists distanced themselves from the problems of the poor and the marginalized, leaving those concerns to their poorer (and lesser-paid) cousins such as anthropologists, social and urban geographers, and (though economists are loathe to be placed anywhere in their company) social workers.

Indeed, to put the matter more strongly, economists have generally waged not a war on poverty but on the poor. The tens of thousands of farmers who have committed suicide around the world in recent years, 20,000 in India alone, or the millions who have come under the tyranny of structural adjustment programs, or the tens of millions who have been pushed into gigantic slums are all silent witnesses to the raging war on the poor which has greatly intensified with the worldwide embrace of market economies. To be sure, there are the likes of Amartya Sen who evince the unlikely image of the sensitive and caring economist, but no one should be mistaken into thinking that Sen is unorthodox as an economist, or that he works in any significant way outside the parameters of liberal thought, now inflected doubtless by multiculturalism and globalism.

From the standpoint of the economists, then, the conferral of the Peace Prize upon Muhammad Yunus is unambiguously a good thing. It gives economists a veneer of humanity and allows them the satisfaction of feeling that they can no longer be viewed as indifferent to the plight of the poor. Secondly, though capitalism’s most strident advocates remain supremely confident that no better alternative has ever been placed before humankind, and that the free market economy is the cornerstone of everything that is good in life, they have always sought to mitigate the representation of capitalism as little better than unchecked greed and rapacious behavior by pointing to capitalism’s philanthropic manifestations. Lately, ‘social capitalism’ has received a fresh breath of life, with such luminaries as Bill Clinton, Bill Gates, Ted Turner, and Bono appearing as supposed friends of the poor.

Though Yunus has little in common with these immensely influential and wealthy paragons of society, he has shared public platforms with them, and can, in the West, be summoned as an illustration of how poor countries can be made partners in conversations about the elimination of destitution, disease, and hunger. As the professional economist in the West sees it, Yunus shows much better than Fidel Castro or Hugo Chavez how economics can work for the poor without alienating the rich. Though economists find words like ‘revolution’, ‘poor’, and ‘bottom’ grating, even they recognize that ‘revolution from the bottom up’ — and it is the bottom segments of society that Yunus has touched with microcredit — has a nice-sounding feel about it.

Above all, however, economists have every reason to applaud the Norwegian Nobel Committee’s recognition of Yunus as an eminently sagacious act of statesmanlike behavior since this honor preserves the absolute inviolability of the Economics Prize. As an economist who has, in the words of the Committee, ‘shown that even the poorest of the poor can work to bring about their own development’, one would have thought that Yunus is deserving of the Economics Prize. Yunus himself, when asked why he had been awarded the Peace Prize rather than the Economics Prize, thought it sufficient that his work had been honored and that, through him, the poor have been recognized. As he told an interviewer in Dhaka, “economics and peace are interrelated — economics influences people’s life.” But this is the charitable response of a cultured man, rather than a political reading cognizant of the oppressiveness of modern knowledge systems.

Since its inception in 1969, the Nobel Economics Prize has been, with an exception or two, the exclusive preserve of white males. Not one woman is included among the 85 economists named to this honor, though women have previously won the prize in physics and chemistry, and more frequently prizes in medicine, literature, and peace. The Swedish Academy of Science and its supporters will doubtless argue that the Economics Prize, like all the others, goes to the most deserving person, and that the Academy is oblivious to questions of gender as much as race, religion, or ethnicity. But the self-representation of economics as a masculinist enterprise, a hard science which is subject to the tests of verifiability, cannot be overlooked if one is to understand the borders that modern knowledge systems place around each discipline and between disciplines.

Peace is all very well and good, economists are prone to think, and it is fitting that women should number frequently among those honored for their contributions to peace. When the economist must think about love and peace, which is not very often, he thinks of how he might accommodate these knotty subjects within an enumerative framework. As a budding young student in a Ph.D. program in economics at a leading American research university once told me at a political economy workshop, “the economist can successfully model love.” Yunus may be an economist by training, but as an economist he, in the language of the economist, has gone ‘soft’. Thus, his discussion of development and empowerment, poverty and poor, even finance and banking, are something of an embarrassment to the economist, who at any rate would much rather talk to his peers than to the poor. Unlike the physicist or natural scientist, who need not flaunt his scientific credentials, and who might even be open to negotiations about what constitutes scientific work, the economist will tolerate nothing that might appear to place a dent in the hard armor of the “economic sciences”.

Muhammad Yunus must, to reiterate, be applauded for his work. There are serious critiques of microcredit, but his accomplishments, particularly in view of the destruction of traditional social and economic networks in Asia, Africa, and Latin America, are immense. Nonetheless, one must be wary of the merchandizing of microcredit by powerful figures and institutions in the West. Yunus’s idea of microcredit is already being hijacked by the likes of Paul Wolfowitz, who has been waxing silly about microcredit’s power to lift the millions of Andhra Pradesh into the ranks of the consuming middle class, as well as Hillary Rodham Clinton, who in a column on 5 April 2000 (‘Talking It Over’) described herself as inspired after a visit to Bangladesh “by the power of these loans to enable even the poorest of women to start businesses, lifting their families — and their communities — out of poverty.” Before Yunus knows it, he will be swept off his feet by the West’s microcredit juggernaut and blitzkrieg. Such is the graciousness of the man that he will put it down as a mark of his success. But what Yunus should know is that the day a peace activist wins the Nobel Prize in Economics, a true revolution in the affairs of the world might perhaps have been launched.