A Dialogue on Philanthrocapitalism: To Add, But Not To Be

Submitted by Moses Lee on July 8, 2008 - 11:19.
Published in: |

This is part 2 of our series reviewing Michael Edwards' Just Another Emperor and the concept of 'philanthrocapitalism'.  Read part 1 here.

Michael Edwards' recent book on "philanthrocapitalism" reminds me of a recent conversation I had with my sister, a social worker. Over dinner one day, she started going off on business types:

Why is it that business people think they are the answer to all the world's problems? You guys come off so arrogant! Somehow, we, who have been working in the civil sector for centuries, struggling to solve social issues, are completely inept, and you guys, who have all the money, are going to solve all the problems.
I think many people have a similar perspective. And perhaps rightly so.

Maybe we business folks didn't enter into the public/non-profit sector scene in the smoothest way. We in the BoP world know that when entering into a developing country, we can't just tell locals what to do and what they need. But perhaps we didn't follow our own advice when we entered into the world of foundations and NGOs. Instead of partnering with and listening to those who have gone before us, we just set up shop and announced to the world, "times are changing -- a new and better way has arrived!" Therefore, I can understand the push back and why Edwards wrote his book, Just Another Emperor?

I think it is important that we from the business field enter into conversation with the public/non-profit sector with absolute humility, because, as we all know, market-based solutions are not the "silver bullet" to all social ills. (There is no doubt that a world that is entirely driven by markets/business principles would not be a world we would want to live in. For such a world would be devoid of love, passion, and inspiration - all elements that are crucial to our human existence.)

But to reject what business people have to offer is an embrace of the very thing we are accused of: arrogance.

Perhaps for the first time ever, we are seeing a movement of business professionals willingly chose lower paying jobs to get involved in solving social issues with their business acumen or making corporate decisions that are socially bent. (And please take note: these decisions are not "market-based." If they were, all fresh MBAs would be working on Wall Street and corporate dollars would all be invested in projects generating a ROI of at least 20 percent.)

It's clear that many business folks "have a heart" and want to make a difference. We want to roll up our sleeves just like those in the Peace Corps. And we reject the idea of living the American Dream of a nice, stable career and a pampered retirement. Instead, we want to bring our skill sets to the table and add to the conversation of social transformation, rather than be the conversation.

Now I ask you, is this a picture of passive consumption instead of active participation? Is this a dilution of "other-directed" behavior? Is this a damaging of civil society, which is the crucible of democratic politics and social transformation?
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In defense of businesspeople
Submitted by Paul Rigterink on July 8, 2008 - 13:27.
In order for businesses to survive, they must sell products that people are willing to buy and which will allow them to make a profit. I believe that most poor people would buy products that allow them to make a living and work their way our of poverty. Businesspeople are actively trying to determine what these products are given the limited resources of poor people.
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In defense of Irreverence ('arrogance')
Submitted by Tobia on July 27, 2008 - 14:58.
Moses The quote at the top is a nasty reduction of very complicated territory. The implication of the quote is that there are two groups: businesspeople and civil service people. The fact is, at the intersection of social work and private enterprise there are tons of disparate initiatives with their own definitions and their own aims- all mixing business practice with social mission. I think that the quote at the top of the page is the wrong opener to this dialogue of philanthro-capitalism. If this is how people feel, I think we should quickly give them a reality check. The wonderful thing about entrepreneurship being applied to social causes is that these sort of ideologically entrenched discussions can be avoided all together. Entrepreneurship entails a level of decentralization that, to me, is all together very refreshing. The production and distribution of public goods and services has for too long been dominated by a few powerful organizations (along with their rules and hegemony). A more decentralized field, with more players competing has more room to accept failures and also more chance of ingenuity and success. The number of parties involved in a given social or BoP venture is limited, so they have a license to take risks that large, publicly scrutinized institutions don't have. Shumpeter's 'creative destruction' comes to mind: entrepreneurs don't ask the incumbent to enter the market, they TAKE market share and/or destroy the incumbent altogether. We have a chance to change the rules of the game, old civil service is going to have to share the market. So, while I agree that a level of cooperation (ie strategic partnerships) is important with a social or BoP venture, I think that BoP advocates and 'businesspeople' should keep their fire and stay away from pandering to entrenched civil service ideology. As for a 'movement of business professionals,' I think that while these people are becoming more compassionate, I think that they are none-the-less chasing rewards (as they have always done). Since the popularization of Microfinance with Yunus and philanthropic efforts by techies, social innovation is glorious and prestigious. The prestige from a social or BoP venture more than makes up for the lower monetary compensation. If business professionals were asked to use their talents, but were not recognized personally by the public, then I don't think they would do it at all. And I don't think that is a bad thing. To sum up: Do we really have to fall back into the game of 'massive, all-encompassing all-inclusive agreement and cooperation?' Lets keep our minds open. Lets resist definition. Lets spend our efforts innovating rather than building dogma. Tobia
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Thanks
Submitted by Moses Lee on July 30, 2008 - 14:39.
Thanks Tobia for this thoughtful response.  You make a number of great points in here.   What I did not necessarily go into with this post are all the distinct characteristics/value-adds of the BoP movement to poverty alleviation.  I believe a lot of these aspects are being teased out on this website as a whole.  
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