Translator: David DeRuwe Reviewer: Claudia Sander
I'm going to tell you about a problem,
I'm going to propose a solution,
and I'm going to make a call for your help.
The problem I will speak about is not inequality.
I don't think, in fact,
that inequality is a problem in itself.
In fact, what I believe to be a problem
is what I call imposed inequality.
To explain a little about what imposed inequality is,
I will tell a little story
that the philosopher and economist Eduardo Giannetti told.
It's a silly little story, but interesting.
He tells that two little friends were walking on the street
and, suddenly, one of them found two apples on the ground.
He picked up the two apples.
One of them was beautiful, aromatic, delicious, marvelous,
and the other wasn't so good -
a little bruised and mistreated.
He picked up the two apples,
gave the bruised apple to his friend and kept the delicious one in his hand.
His friend looked at him and asked, "Hey, why did you give me the worst one?"
He answered with a question,
"If you had found the apples, which apple would you give me?"
And he said, "Well, the best. I would give you the best apple."
And he answered, "It's all good then, you got exactly what you wanted."
(Laughter)
What do you learn from this little story?
That the problem isn't getting the worst apple.
What's important is how this process takes place, how this apple gets to you,
if it was your choice or not.
Some quick facts for you about inequality in Brazil.
We all intuitively know these facts,
but today, the 23rd of May, 2015,
at exactly two minutes before one o'clock in the afternoon,
we have 50 million people
trying to live on approximately 13 Brazilian reais or less per day,
trying to get through each day like this.
We still have in Brazil what they call "basic" sanitation,
because, if it is basic, it should be basic,
and everybody should have it.
We still have 40% of the country's homes without "basic" sanitation.
In the Northeast, this number is 60%.
In the North, this number is 85% of the homes without basic sanitation.
What's the consequence?
The consequence is that this brings a series of illnesses, for example.
Who is most affected by these diseases caused by lack of sanitation?
Half of the affected are children.
A child affected by a disease caused by bacteria, etc.,
has problems, for example, in cognition, in cognitive thinking,
which will affect the child's learning process.
It is as if at the beginning of the race
the child starts with a weight already tied to his or her foot.
As was already said here before,
to speak of a meritocracy in an unequal society
is a fable, a lie.
When we start to think of possible solutions for this,
it is also very common to hear,
and we sometimes say,
"If only we increase the size of the pie.
Let's increase the size of the pie,
and then we won't need to worry so much about the size of the pieces."
I'll share some data with you from professor Richard Wilkinson.
He introduced it also in a TED talk which I recommend you watch
in a deeper way.
What does this data show us?
On the horizontal axis of the graph is the level of income inequality;
on the vertical axis,
is the quantity of social and health issues
that occur in a society.
This graph concludes that there is a stark correlation,
even in very rich countries -
The bigger the inequality in a country,
the more problems there are with violence,
social tension, psychological stress,
and health problems tied to psychological stress on account of social tension.
So the size of the pie question seems to not be the answer, and not only that,
this data shows, also, that inequality,
contrary to what we imagine,
affects everyone, affects us all,
regardless of where we are in the social pyramid.
Another super interesting thing ...
Who here has been to Slovenia?
I imagine nobody will raise their hand.
I don't know why I raised mine because I also haven't been there.
In Slovenia, the size of the pie
for income per capita adjusted for buying power
is half the size of the pie of the United States.
Half the pie size,
but by having this pie better divided,
Slovenia is 16 positions above the United States
in Human Development Index, HDI, adjusted by inequality.
It is in 12th place,
while the United States, that is in 11th place for income per capita,
plummets to 28th place.
What I want to call your attention to
is that the way that we divide the pie
is more important than the size of the pie.
Because we're a country of continental dimensions
and are considered to have the 6th, 8th, or 10th largest global economy,
we always seem focused on the discussion of how much Brazil can grow,
and we talk little about how well the pieces of the pie are divided.
What's the essential cause
at the heart of inequality?
I want you to close your eyes.
Without sleeping, please.
If someone snores, we will hear.
Close your eyes and try to remember
the last time that you saw a person
in a position of vulnerability -
perhaps on the street, begging for money, or thrown out onto the sidewalk.
Try to think how this person was, what characteristics he or she had,
whether you helped or not, and whether you felt impacted or not.
Now open your eyes.
I have a question for you:
Do you think the person you imagined looks like who's on the screen or not?
I imagine that for most of you, no.
This is a very poor girl who lives in Romania
and lives in extreme poverty there.
What I want to call to your attention
is that the heart of the inequality problem,
in the end, is in our perspective
The fact that we don't see the other as one of us
prevents us from taking direct action to resolve the problem.
The question that I have for you is:
If you were in that vulnerable situation, would you help yourself?
If it were you there, what urgency would you feel inside
to think of some way, some action, to resolve the problem?
The cause of inequality, therefore, begins with our perspective.
Inequality is inside of us.
Another important cause of inequality is this one.
Obviously it's a joke. This is a picture of a refrigerator.
I had an economics professor who joked about this,
saying that the greatest evil for humanity was the invention of the refrigerator
because in ancient times humans hunted,
and could only hunt enough to eat that same day,
maybe the next day,
because they had no way to store things after that.
But, after humans invented the refrigerator,
we developed the notion of accumulation, and we started to accumulate things,
maybe even if we couldn't use them in our life.
We accumulate, and with money, it is no different.
The United States reached, two or three years ago,
the biggest index of inequality in the last 100 years of its history,
and one of the main causes for this inequality was - guess what? -
the salary gap
between those at the top, the directors of the large businesses,
and the people at the bottom, making the business happen.
I dream, therefore, not about the end of inequality,
but about the end of imposed inequality.
For what? So that the true differences between us appear.
Today we don't know how real the differences are or not
because, again, the starting line is very different.
As has already been said here, there are people starting 50 meters ahead,
so we don't know how different we are from the others.
I'm done describing the problem.
Now I'd like to move on
to talk about one possible solution for the problem of imposed inequality.
So, I want to begin this part by asking you a question:
What is a good deal?
When we think of a good deal,
what's the first thing that comes to mind?
Don't be ashamed because I know what comes to your minds and still comes to mine -
a good deal is that which makes money, a good deal has a good margin,
has a lot of profit that will leave me rich or maybe a millionaire -
this is a vision of a good deal.
I want you to imagine with me:
What if a good deal, in fact, was a company,
a company like any other,
only that you create this company
not necessarily to maximize profit or to be a millionaire,
but you open this business
to resolve some social or environmental problem?
The mission of the company would be exactly this:
to resolve some social problem.
You would work on it,
you would have some product or service that would resolve this problem,
and the revenue that you would get by selling this product or service
would cover costs and generate profit -
only the profit from this company wouldn't stay with you.
You would be paid a good salary, a great competitive salary, and live well,
but the profit, what would you do with it?
You would always reinvest it into the company
because the focus is the social problem,
so you reinvest to guarantee the company's mission is accomplished.
If you could sell that product cheaper
so that more people could have access to it,
you could reinvest the profit accordingly.
What if this type of business existed?
This type of business exists.
This is the good news.
This type of business is called social business.
To explain about this to you, in a little more detail,
social business mixes two worlds:
it has the objective of an NGO, it is created to maximize social impact,
and it has the financial sustainability of a traditional business.
It sells a product or service, and this pays the bills.
The business, therefore, doesn't depend on donations.
So we joke that this has the best of two worlds:
the NGO world
and the traditional business world.
This concept was developed by a man named Muhammad Yunus.
I would recommend some TED talks here that talk about him and his life,
but for your information now,
he is the only economist
to win both the Nobel Economics and Peace prizes
for the invention of microcredit, which helped to reduce, by half,
the number suffering extreme poverty in his country, Bangladesh.
This concept has spread around the world.
He also elaborated this concept of social business.
I'll tell you a quick story about one of the companies that already exists,
created with this gentleman, president of the world's biggest yogurt company.
They were having lunch, and Yunus said to this president,
"I have heard that your yogurts are really delicious and marvelous.
Why don't we create a business in Bangladesh?
In Bangladesh, 56% of the children suffer from malnutrition.
We could take this yogurt that you make
and put in micronutrients, vitamins, whatever the scientists say.
We could sell this yogurt at a lower price than normal, there in Bangladesh,
so that poor villagers could buy it.
The children would eat this yogurt and overcome malnutrition."
The president of Danone immediately said, "Done! Let's do this!"
Then Yunus said, "I'm not finished yet. It is a little more complicated than this.
What we're going to open is a social business,"
and he explained for the president of Danone that they would open a company,
invest in the growth of the company,
and that he could recover all the investment that was made,
but after recovering the investment,
not one more cent would go to Danone.
The profit would stay in the company.
He explained this to the president of Danone, who said,
"Done! Let's move on!"
Yunus jokes that when he said this,
he was sure that the president of Danone hadn't understood his English.
(Laughter)
His English has a strong accent from the Bengali region of India.
This business exists; it's already been in existence for more than seven years.
This yogurt exists, and, if a child eats it approximately two times per week,
in eight months, they will overcome the condition of malnutrition.
It's a company that has already paid its operational costs,
started to produce profit,
and now is beginning to expand in Bangladesh.
This is just one case.
How do social businesses confront imposed inequality?
In two ways.
The first and most obvious way is by attacking the problem directly,
through its mission of ending child malnutrition,
resolving the sanitation problem, some company of education.
So this is the first way of attacking imposed inequality.
And the second way, what is it?
Despite paying good salaries, there is this control of accumulation.
You, rightly, don't have a refrigerator at home
and keep saving money that maybe you can't even use in this life -
it obliges you to reinvest in this social business to amplify the impact.
When I talk about this business model,
what is the first question that I hear?
"Cool, but who will invest in this?"
Who will and who does invest in it
is the billion-dollar philanthropy industry.
People who already give money donate a million dollars each year to an NGO,
but, with a social business, they only have to make a donation once.
They invest in a company, and later, the company sustains itself
and doesn't need more donations in following years.
So, there's an optimization of this philanthropic money.
It's a movement that's growing quickly.
We're talking about Bangladesh, but it's growing quickly, too, in Brazil.
There are hundreds of entrepreneurs.
I will go quickly through some names:
Here's Amilton - he has a business to resolve the problem
of healthy food scarcity inside the Rio de Janeiro favelas.
Howard - he created a hearing aid that's rechargeable by solar energy,
which drives down the price of the device;
it costs 70 to 80% less by not needing a battery.
Henrique - he has a social business
that installs solar panels in favelas.
Residents of these zones,
like Gilson Fumaça, who lives in a community in Rio de Janeiro,
also is a social business entrepreneur.
There are urban orchard social businesses.
There are famous persons, too, involved it it.
Marcelo Rosenbaun is creating a social business.
People here from Porto Alegre,
two entrepreneurs who participate in our accelerator.
Universities are getting involved -
there's a network of more than 20 universities specializing in this.
Increasingly, the media is covering this.
Yunus was recently on "Programa do Jô"
and gave interviews to many news outlets.
Amazingly, already there are cities that are becoming social business cities.
Politicians are adopting social business as public policy.
Barcelona is one of those.
Another question that people ask me, "How do I work with this?"
My ironic answer,
"If you're selfish enough in a good way,
you already have what you need to work in social business."
Why do I say this?
Because social business brings such great joy
by making a collective impact on others -
it's very selfish, but it makes you feel so great to work with it.
So just start by thinking of a problem in your neighborhood, in your building,
whatever bothers you, and start to think of a solution for it.
Finally, I want also to share this:
There are many journalists who ask me,
"Rogério, don't you think this social business is just a fad?"
And the answer I give to them is,
"It may be, but imagine if this fad catches on?"
(Laughter)
Thank you.
(Applause)
(Cheers)