Illustration by Nicholas Massarelli
Caveat Emptor
by Jerry Silberman
Question: Is social entrepreneurship a way to build a sustainable society?
The Right Question: Can any entrepreneur really be expected or trusted to do
the right thing when the going gets tough?
The term “entrepreneur” has a newly minted positive cachet in our society, the result of a concerted effort to frame as a hero and role model an individual who becomes fantastically rich within his (and yes, they are overwhelmingly male) own lifetime, allegedly because of his particular talent or genius. It’s the success of the American Dream on steroids. Think Gates, Jobs, Zuckerberg, the Koch brothers. One such entrepreneur has just parlayed that success into the White House.
When I was in school, we learned that Andrew Carnegie was a robber baron; today he is remembered as a great entrepreneur and philanthropist, a man who endowed music halls, foundations and libraries. But I still remember that some of his employees were murdered for attempting to form a union.
The entrepreneur is a very different character in my mind than a small-businessperson. The latter starts a business to support their family, based on their particular skills or talents, with no dream of becoming a huge corporation or accumulating wealth—someone who takes pride in being a member of their community and contributing something of value. This person understands the limits of their business and is concerned with their personal relationships with their customers. It’s the doctor or plumber who makes the emergency house call on Christmas Eve (without charging extra!), the grocer who gives a laid-off neighbor credit or an unofficial discount: This was the business behavior that earned (and still earns) respect in a community.
Corporate behavior will have none of that. Large insurance companies are proud of their ability to figure out ways not to pay claims, or how to cut off people whose claims they know will exceed their premiums. Hedge fund heroes win praise for purchasing companies and slashing wages and benefits of workers who have no place else to go.
To the extent that a social entrepreneur seeks to set up a business that addresses a social problem and places the contribution to the good of society ahead of unlimited personal wealth, she or he is reviving some old-time community values, tapping into a tradition that modern mega-business is busy trying to extinguish. It seems every possible business gets compressed into a cookie-cutter chain. (Philly Pretzel Factory has just about eliminated one of my favorite foods, in favor of their tasteless, textureless white bread with salt.)
The unremitting effort of capital to turn every human relationship into a commodity has as its inevitable consequence the effect of destroying and debilitating communities, and relations of responsibility and accountability between individuals. Caveat emptor—buyer beware—becomes, in a fully commoditized society, the “Trust no one” mantra of “The X-Files.” The word “entrepreneur” or the phrase “social entrepreneurship” implies individual authority and accountability, which leaves a huge loophole for what nonprofit organizations sometimes call “mission drift.” In the case of the well-intentioned entrepreneur, it’s what happens when the business isn’t going as well as expected, and her community-centered choices about ethical sourcing, fair wages or environmental commitment start to erode—or go away entirely.
Unfortunately, the concept of “social entrepreneur” doesn’t make the systematic break with values of consumer capitalism that it needs to. It doesn’t clearly enough move to replace the primacy of market and profit with the primacy of community, and ultimately that’s what needs to happen if we’re to have a viable alternative to big business.
If we want to change the direction of our culture, we must move away from the values that maintain it. This means that leaning on the “entrepreneur” as a role model and hero who will solve social problems must be jettisoned in favor of the community, and community builders and organizers. While I applaud individuals who want to do the right thing in their businesses, the structure of a proprietorship, or even a partnership, is very limited in its ability to challenge the alienation of the market, and owners are under phenomenal pressure.
Judy Wicks, a Philadephia hero and, yes, an entrepreneur, has led great work to stimulate the development of companies that honor the triple bottom line, but they account for a vanishingly small part of our total commerce and cannot compete with the purely profit-driven corporations in the larger marketplace.
Social problems need social solutions, i.e., solutions identified by the communities that they affect. They need to empower members of the community to be accountable to the whole for the solution to the problem. The volunteer fire companies that provide fire protection in many smaller Pennsylvania communities are a model of what I’m talking about.
We need communities where neighbors share skills, labor and compassion with each other because they understand that this increases their own security, safety and happiness. We need to have more respect for the person who can repair a bicycle, lamp or computer than for the person who can afford to replace it at the first sign of a problem.
We need to pool our time and energy working within our communities to solve problems locally, as a model for solving the larger problems that cross all of our communities.
Jerry Silberman is a cranky environmentalist and union negotiator who likes to ask the right question and is no stranger to compromise.
Thanks for your essay. "Social entrepreneurs" and predators are not synonymous. I’d like to believe that I understand your sentiment, especially after having read "From Predator to Icons: Exposing the Myth of the Business Hero." Yet, most people who have social entrepreneurial characteristics are not alpha predators, and tend to play positive roles in our society. Their willingness to act and harness their independence, their courage and their capacity to see things differently than most people, differentiate them, and is a reason why we need them (in addition to the rest of us, as you rightly state, using "our time and energy working within our communities to solve problems…"). A social entrepreneur would act if she scoped out an opportunity to encourage a large segment of our society to, for instance, share their opportunities, networks and wealth with people and communities who need access to these items; or help children living in southeastern PA gain access to quality and safe schools located throughout the region. Crazy and audacious ideas? Yup! But these are the types of opportunities and difficult missions that "social entrepreneurs" would undertake (after de-risking them, a bit), and why we need social entrepreneurs (at least, that is, until their drive to undertake the difficult and necessary missions that most people won’t undertake, succumb to other influences).
I believe the power of the term social entrepreneur comes from directing the entrepreneur’s talents and energy toward solving significant social or environmental problems. Instead of solving problems of inconvenience for middle and upper-class populations, they can focus their innovation on populations and markets that are typically underserved.
As an impact investor, I am looking to direct my capital toward funding companies that are creating good for society as part of their business model. In these situations, as the companies grow, the benefits also grow. It is not a matter of the entrepreneur choosing to do the right thing vs. grow her business, they are fundamentally linked. Look as a company like Edovo or Propel that came out of Good Company Ventures’ Fast Forward program. Edovo provided education to inmates via ipads and Propel enabled Snap Benefits through better technology. As their businesses grow the public benefits also grow. This is the difference between social entrepreneurship and Corporate Social Responsibility.