Why Business Might Just Save the World (Part 2)
Note: See Part 1, which helps place this post in context.
Most students of history can recount in detail the long and painful story that accompanied the rise of market-dominated consumer societies. From Slavery to Colonialism to disease epidemics, capitalism has taxed communities and the environment as much if not more than it has given back. But ultimately, the process has fallen short of reducing men and women to consumers only. We’re still self-organizing into non-market communities of support, faith, and friend networks. And we still care deeply about our one another and the environment.
The market has failed in its effort to reduce us to just consumers, but just barely. I believe its advances and ultimate manifestation is found in theories of social transformation that depend on Civil Society & Philanthropy acting alone in opposition to the private sector. Such theories of opposition presume that the market has “its own devices” that it can be left to, as opposed to being an invention of humanity over several centuries which as such, can be copied, modified, reprogrammed, and even rebooted.
The second area in which I have some hands on experience is social finance, a field in which a critical mass of really smart people are attempting to do exactly that: copy, modify, reprogram, and reboot how and why investments in profit-generating ventures are made. Social finance practitioners, or impact investors as they are also known, are adding many shades of grey to the previously black and white world of philanthropy vs. investment.
Impact investors and the social enterprises they invest in are not hybrids of two or more sectors. They are a synthesis. Not a “soggy meeting ground” as Michael Edwards has described the field but a fertile and empowering new space that stands on its own, with deep roots into and extensions across the private sector, government, and Civil Society.
At the most fundamental level, social finance differs from the market from which it has evolved in that it embeds values and meaning into people’s lives instead of atomizing and dis-embedding the individual from his or her surrounding community and environment. For example, social finance enables products and services such as Bixi bicycles, which are shared, promote healthy lifestyles, get people out of their cars, and reduce a commuter’s impact on the environment. Traditional finance, by contract, invests in automobiles that are privately owned, remove people from the streets they travel on, and release tremendous amounts of carbon into the atmosphere. Investments in shared transport as opposed to privately owned cars is a simplification but hopefully illustrative of finance re-purposed.
Over the next several decades, I believe a large number of very compelling opportunities will surface in Canada and abroad to create financial wealth and effect positive social transformation. Identifying and investing in these opportunities has been and remains the preoccupation of impact investors and social entrepreneurs. And remarkably, the professionals working in these areas represent some of the greatest allies to both the 99% and the 1% of which we have heard a lot about recently.
Impact investors and social entrepreneurs are not embracing the private sector and business approaches out of a lack of courage, creativity, or activism. On the contrary, they are modern day reformers who want to be earning their livelihood from discreet and largely autonomous projects with a social purpose. From what I have seen, the pace and formalities that accompany traditional Civil Society & Philanthropy cannot accommodate their ambition. In fact, many impact investors and social entrepreneurs would probably argue that independent revenue streams create more freedom to pursue a socially transformational agenda than dependence on traditional grants and donations.
To think that a legal structure can or cannot save the world is misguided. A new generation of social activists is sector and legal-form agnostic. If business professionals want to “save the world” prior to, while, instead of, or after amassing large fortunes, that's fine by me. And their efforts should be conceptualized as part of Civil Society & Philanthropy, not apart from it.
I read the work of Michael Edwards knowing I'd have to disagree. But at a fundamental level, I think we’re simply ascribing the same world-changing characteristics to different elements of the community-business continuum. He and I agree on the ultimate prize - "an economic system that can sustain material progress with far fewer social, personal, and environmental costs."
Photo credit: http://www.flickr.com/photos/angela7/56957509/
