Paradigm Shifting Economics from Adam Smith to Mohammad Yunus: Theorizing a Global Action Model for Social Business Capitalism

The evolution of capitalism from Adam Smith’s self-interest-driven moral philosophy to Mohammad Yunus’s socially motivated market model represents a profound paradigm shift in economic thought. While Capitalism I, grounded in classical economics, has generated wealth, it has also produced systemic inequalities, environmental degradation, and social exclusion. This article theorizes a transition to Capitalism II—a pro-poor, sustainability-oriented form of capitalism—by integrating the principles of social business as developed by Yunus. Drawing on both primary sources and peer-reviewed literature, the paper situates social business within the framework of the United Nations Sustainable Development Goals (SDGs) and proposes a Global Action Model for multi-level implementation. Case analyses include Yunus’s original partnerships (e.g., Grameen-Danone, Grameen-Veolia) alongside other initiatives (e.g., Grameen Shakti, Grameen Eye Care Hospitals). The proposed model emphasizes market-based yet non-dividend approaches to address poverty, health, and environmental challenges, offering a scalable pathway for embedding social innovation into global economic systems.