The Anarcho-capitalist take on Yunus and Grameen bank

[Arnab]

Does he miss the point of Grameen altogether? Or does he have something substantial to say?

The real problem in Bangladesh is not its lack of personal indebtedness but instead is revealed in the account in the Index of Economic Freedom. Its government's bad economic policies include huge barriers to trade, vast amounts of state-owned enterprise, unionization, heavy taxes on foreign investment, a high tax burden, and some of the world's worst political violence and official corruption.

The irony of it all is that Bangladesh is making economic progress in its export sector for fish and clothing. There is no mention of Grameen's contribution to its 5% rate of economic growth in any reliable source.

The best that Professor Yunus could do to help his country would be to use his now-considerable credibility to push for a freer market through radical privatization and free trade. And it is true that he has pushed a bit for halfway privatization in health care. But in general, he has a stake in keeping the status quo just as it is. In the meantime, there is really no excuse for serious analysts of the Grameen experience to pretend as if money alone is going to save the country.

Source:http://www.mises.org/story/2375

Remember, this is an anarcho-capitalist take. They hate anything that even remotely smells of socialism. You can tell from the opening para that the guy is seething inside because he couldn't find any dirt on Yunus.

[Special 1]

Very interesting post showing the view point of a Neoclassical economics. But it terms of practicality grammen bank has definately performed better than free markets idea as it is being or was advocated by the IMF. Sen and Yunus, the fathers of community based development has shown the flaws in the assumptions of neoclassical economics. Just because there is assymetry in information doesnt mean loans shouldnt be given out.

About data related issues, i will not say anything, but grameen bank does not have a mandate to maximise profits like commercial banks hence they do microcredit and the idea of other people being your collateral is amazing. You cannot have economic freedom if you do not have access to credit, education and freedoms i.e. in Sen's words "capabilities".

However, Grameen banks do have a flipside to its operations. Because of its micro nature it makes sure that women will remain marginalised longer than they would have been. Because of these credits females often dont complete higher education and hence are not sufficiently empowered. Nonetheless, it does make women somewhat empowered.

Market based economic approach only works when you have well established markets, which means that there is free flowing information amongst many buyrs and sellers. Most countries have failed to achieve that and switching to market based systems without having built up the proper infrastructure has led to a lot of problems in a lot of countries.

Free trade is not always fair trade. All those economic markets assumes a lot of things that are somewhat ridiculous. Grameen bank has worked and it has done so by showing caveats in banking theories. I am a little disappointed that Yunus did not get a Noble prize in economics for this invention.

[Kabir]

We are told that Yunus discovered a wonderful new way of making profitable loans to the poor by doing something that all conventional bankers in Bangladesh had overlooked. Half the population lives below the poverty line in Bangladesh. Are we really supposed to believe that banks blithely overlooked millions of poor people out of bias or hatred or snobbery?
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The best that Professor Yunus could do to help his country would be to use his now-considerable credibility to push for a freer market through radical privatization and free trade. And it is true that he has pushed a bit for halfway privatization in health care. But in general, he has a stake in keeping the status quo just as it is. In the meantime, there is really no excuse for serious analysts of the Grameen experience to pretend as if money alone is going to save the country.

Poor editor. He doesn't know a thing of what he's talking about. He mentioned that the noble prize committe didn't do a thorough check? Looks like hasn't done that himself.

He's a pro free-trade person. What better can you expect from him? But yea, good to hear a different opinion...now we know why Grameen is actually a success. He's talking about 5% economic growth in the country doesn't have Grameen's name mentioned anywhere. Poor guy...he doesn't understand Yunus's theory itself. The theory is for national trade, not international. Idiot.

[Kabir]

Even if we can accept that he had some sort of entrepreneurial insight that no one else had, Grameen has been giving loans to poor women for thirty years. Are we really supposed to believe that conventional bankers were so stupid as not to spot this opportunity even after decades of demonstration? Yunus says that he discovered that the poor are "bankable" but if this were true in the way that he says, others would have discovered the same profit opportunities and done it without help from government.

Dr. Yunus's theory has been employed for great success in a few African countries. I don't know what the editor is getting at? What does he mean by the fact that if this idea was so revolutionary, banks would have picked up the idea long time ago? Which part of the world has a bank that gives out loans like that? I never heard of any. He might be upset that someone he wanted to win the Nobel Prize didn't win it...so he's just bitchin about our Yunus Sir.