Ever since the collapse of its communist competition a quarter century ago, capitalism’s viability as an economic platform for human well-being has been questioned. As early as 1991 Pope John Paul II asked:
… [C]an it perhaps be said that, after the failure of Communism, … capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World …?
The answer, the Pope explained, could be yes:
If by «capitalism» is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, …
However, the answer could also be no:
But if by «capitalism» is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative.1
Capitalism, in other words, needs a human face. If driven purely by profit, capitalism will enrich winners, impoverish losers, and obstruct community.
But how to humanize capitalism? By relying on market forces? On State regulation? On government welfare programs? On private charity?
In the past quarter century of capitalism triumphant, none of these answers has proved adequate. Markets ignore externalities. They under-value aspects of human flourishing that cannot be monetized or do not directly benefit owners. States are too weak, and too vulnerable to political influence by businesses, to regulate markets fully and effectively. State budgets and private charity are too poor to make up for the welfare deficiencies of markets.
An additional response –if not a fully satisfactory answer– appears in the array of approaches described in the present volume (and elsewhere) as «social entrepreneurship.» While definitions vary, essentially the concept refers to using business techniques, not only to generate economic profit, but also to pursue social and environmental goals in innovative ways.
Thus defined, social entrepreneurship parallels the well-known accounting concept of the «triple bottom line, which measures not only an entity’s economic profit or loss, but also its social and environmental impacts. Social entrepreneurship, however, adds the element of the entrepreneur’s using innovative or creative ways to make these bottom lines positive.
The diversity of mechanisms for social entrepreneurship, as described in this volume, is sprawling. Traditional profit-making businesses may choose to recognize their social and environmental responsibilities, whether by giving back a portion of their profits to communities, by treating their workers and their families with dignity, or by tailoring their business activities to avoid adverse social and environmental impact.
Other enterprises may find ways to profit on socially or ecologically beneficial products (e.g., manufacturing and marketing solar panels). Still others, such as some micro-finance lenders, may insist on...