An open path to self-employment. The revolutionary and hopeful alternative of Social Entrepreneurship
| Autor | Dr. Rogelio García-Contreras |
| Cargo del Autor | Associate Professor. University of St. Thomas, Houston, USA |
| Páginas | 77-99 |
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One of the principles of what a new wave of development and business scholars call Social Entrepreneurship is the recognition that today’s global flow of capital, services, goods, people, images and communication reflect the multiple angles and complexities related to the security and development of human beings around the planet. The prosperity and well-being of one person, one community, one nation, rests on the decisions of many others –sometimes fortuitously, sometimes precariously, but always decisively.
The notion of social entrepreneurship is a relatively new concept. Basically, social businesses, conscious entrepreneurial capitalism, social entrepreneur-ship, Philanthropic Capitalism, Corporate Social Responsibility and related concepts complement the notion of state-oriented security by enhancing the idea of basic human rights and strengthening the virtues created by being able to live happy, healthy and sustainable lives. According to the United Nations Development Program, today in our world more than 800,000 people a day lose their lives to violence. About 2.8 billion suffer from poverty, ill health, illiteracy and other maladies. Conflict and deprivation are interconnected. Deprivation has many causal links to violence. Conversely, wars kill people, destroy trust among them, increase poverty and crime, and slow down the economy (Human Security Report, 2011). Addressing such insecurities effectively demands a comprehensive approach.
Thus, for the vast majority of economists and development experts of our time, the notion of social entrepreneurship may not only mean the only real possibility we have to effectively address the kind of environmental, social and economic problems affecting our world today, but a powerful and realistic alternative for the protection of what Amartya Sen calls vital freedoms (Sen, 2000). Social Entrepreneurship means protecting people from critical and pervasive threats by building real and profitable solutions based on their own strengths and aspirations as economically active members of society. It also means creating viable and sustainable businesses for the purpose of a greater good. Creating a profitable business is incredibly difficult; doing so taking into consideration major social and environmental variables is a lot more.
So the notion of social enterprise is in and by itself the manifestation of a whole new paradigm in the way of conducting business and relating to the market itself. It refers indeed to the tacit recognition of free market economics and certain basic capitalist principles as the most
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efficient way to generate sustainable solutions to existing collective needs. Fostering the selfish incentives present in every entrepreneur, social entrepreneurship finds in social or environmental challenges multiple opportunities to conduct business by addressing such problems.
Social Entrepreneurship is not an attempt to substitute the government or take over its responsibilities. Instead, a social enterprise identifies the potential of private business opportunities in some of the social or environmental needs that traditionally have been considered to be the responsibility of states, or that have been abandoned to the mercy of nongovernmental aid or private philanthropy. The magnitude of the challenge, the structural poverty existing in most of the countries affected by these problems, and the democratic deficit prevailing in most of these countries, call for non-conventional, ‘out of the box’ solutions.
The following paragraphs are an attempt to reflect on some of these unconventional alternatives. But more than reflecting on the different ways in which the fields of finance and innovation, social impact investing and private capital are being harnessed to address social and environmental problems, and could be used to tackle endemic problems such as inequality or unemployment, associated with the current economic crisis. The idea is to show how greed and short-sighted decisions in the free market economy have led to a decadent state of affairs that can only be overcome by a reinterpretation of the value and purpose of the free market itself. A new paradigm drawing from the principles and values of what some experts are calling social impact capitalism, philanthropic capitalism, social entrepreneurship, and similar references.
The chapter then includes a humble example of this new paradigm. Deliberately highlighting the principles that work, it focuses on the particular experience of the Social Entrepreneurship Program (SEP) at the University of St. Thomas in Houston, USA. The Social Entrepreneurship Program is one of the many co-curricular, service learning or academic programs emerging across the nation at institutions of higher education. The effective construction of a new paradigm requires a new logic and epistemology in the fields of finance, economics, development or business administration, just to mention some. The role of colleges and universities in this endeavor becomes fundamental. The experience is shared with the intention to contribute to the conversation and the collective construction of know-how in this brave new field of social entrepreneurship or social impact capitalism.
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We live in an open market economy. The more optimistic or naïve call it, free. An open market economy essentially refers to the very liberal idea in Western political thought of an open space for civil and economic interaction. According to this tradition, and at risk of oversimplifying the idea, the open market economy is then the place where everything is on sale, including of course the free will of the individual. But if everything is on sale it is only because the contract guarantees through well-established rights the possibility for individuals to do so. An important characteristic of the open market economy, at least in theory, state or government participation in the market is supposed to be limited to the provision and enforcement of those basic rights that guarantee the possibility of a prosperous interaction. The success or failure of any economic transaction depends –under this logic– on the talents or skills of the merchant, the trader. The government must have nothing to do with it, except when it comes to guaranteeing the market’s freedom and very same possibility.
So if we were to review the social contract tradition addressing the notion of open market economies, you will discover that the whole idea of prosperity and wealth accumulation is founded on the idea that human nature –as interpreted in the Judeo-Christian tradition of which Hobbes, Locke, Rousseau or Montesquieu are inheritors– cannot be changed but only channeled and eventually controlled. Selfishness and greed are aspects so imbedded in our human condition that the best we can do as rational creatures is to channel and control them for the benefit of one self and our own communities. Human Nature cannot be fought and if left alone it can lead to self-destruction. But this can also be used to our advantage if we learn to channel it and control it with the very same tool that allow us to distinguish ourselves from nature: Human reason.
The state, which at least in theory accounts for pure reason, is there to help individuals control and channel their own nature. However it is up to the individual to make the most out of this basic opportunity for a secure and peaceful interaction. The social contract is the opposite to the State of Nature which is the State of War. But since we cannot denied our nature but only control it, the Open Market within the contract looks a lot like the State of Nature insofar that it is a place of selfishness, greed and rampant competition.
And what is the name of the game in this space known as the market? Wealth accumulation. In pure economic terms, the open market, as
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we know it, is ruled by a very simple interaction between two basic forces, one involving all the items that are offered in the market (supply) and the other involving all the items that are consumed in that same market (demand).
Since all participants in the Open Market Economy are free and rational individuals pursuing their own best interest, sooner or later the market develops market diversification and division of labor to try to optimize the search for a basic equilibrium between everything that is produced and whatever is demanded. Inevitably, the forces affecting the behavior of supply and demand in the market (many of them invisible to the naked eye) balance themselves, and sooner or later, they pursue an equilibrium point with more or less efficiency. The more competition, the freer the market.
So at least in theory this is what an open market economy is. Adam Smith, the father of liberal economics, was convinced so much of this rational and selfish behavior back in the 18th Century that he never doubted the disposition of those successful merchants of the commonwealth to share their wealth with the less fortunate whenever necessary, so the viability of the market remain possible. Thus, for the sake of preserving and even improving their own livelihood and economic circumstances, greedy and selfish individuals can, and in fact should help less fortunate members of the contract in an act of fraternity and solidarity, not necessarily among themselves but between themselves and the commonwealth.
The original idea of the open market economy contemplated the very outrageous Robin Hood-like idea of taxing the wealthy to give to the poor, the so-called Welfare...
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