The Logic of Gift o “The great challenge before us . . . is to demonstrate, in thinking and behaviour, . . . . that in commercial relationships . . . .the logic of gift . . . can and must find . . . [its] place within normal economic activity.” o “From everyone who has been given much, much will be demanded; and from the one who has been entrusted with much, much more will be asked” (Lk 12:48).
Social Entrepreneurship and Benefit Corps: Creating Space for a Logic of Gift Space “needs to be created within the market for economic activity carried out by subjects who freely choose to act according to principles other than those of pure profit, without sacrificing the production of economic value in the process. . . . . [The Logic of Gift] . . . requires that shape and structure be given to those types of economic initiative which, without rejecting profit, aim at a higher goal than the mere logic of the exchange of equivalents, of profit as an end in itself.” Benedict XVI
Social Entrepreneurship : broadening possibilities for value creation Exciting new field Has launched a thousand books, a dozen institutes, hundreds of courses and even some majors Has broadened external interest in entrepreneurship It is everyone’s new darling The ‘lefties’ love it because it could be a way to humanize the inhumane world of business The ‘right wingers’ love it because it encourages free individual action to solve problems without government
Social Entrepreneurship: the danger of creating another new ghetto A tension already exists in business schools between the financial purpose “maximizing discounted cash flows” and the moral purpose “contributing to the greater good.” Divisions and disciplinary boundaries have multipliedhiding tensions, disguising essential paradoxes q Introduction of social entrepreneurship can contribute to yet more ghettoization between “business as finance” and “morality as a constraint” Liberal education demands more integration less separation, more paradox, less certitude
Social Entrepreneurship: the danger of rhetoric The rhetorical risk: The narrow definition of S.E. as non-profit. Relatively benign re-branding of the word ‘charity’ Negates all the potential of “broadening the playing field” (Dees) and encouraging new structures The broad definition If everyone and everything creative is social entrepreneurship then the term becomes meaningless Implied morality If certain ventures are given honorific term “social” does that mean that ordinary entrepreneurship is “anti-social”, “asocial” If we encourage ‘social entrepreneurs' to do the good stuff in the world, does that clear the consciences of ordinary entrepreneurs to not even have to think about what is good?
Social entrepreneurship: the danger to the meaning of work Distorting the meaning of work: The field has struggled with definitions but there is some consensus “Adopt a mission to create and sustain social value not just private value.” “Recognize and relentlessly pursue new opportunities to serve that mission” “Act boldly without being limited by resources currently in hand” “Exhibit heightened accountability to the constituencies served and for the outcomes created.” “Paying attention to market forces without losing sight of their underlying missions” “A change agent to create and sustain social value without being limited to resources currently in hand” But which of these characteristics do we think should NOT apply to all business institution, all entrepreneurs? What does work mean if these characteristics are seen as being distinctive only to “social enterprises?”
So how do we get out of this hole? We need to stop digging for more and better definitions We need to recognize that the problem is a symptom of the “separation thesis” (Freeman) that we need to stop trying to talk about value creation and meaning/ morality separately We need to ask a different question
A better approach Stop asking “What is social entrepreneurship?” “What is distinctive about social entrepreneurship?” “What are some unique theories of this new discipline?” We need to ask “what does it mean to be a Good Entrepreneur?” “What is the difference between good entrepreneurship and bad entrepreneurship.
Good entrepreneurship Fortunately we have some answers for this already. We draw from a framework of Catholic Social teaching, but these values are widely share across culture, religions and non-religions There are at least three distinctive ways entrepreneurship can contribute to the greater good 1. Good goods: through the creation of good goods and services that enrich our lives 2. Good work: from the development of good character from the activity of working and development of community through the positive relationships trade requires 3. Good wealth: through the creation of sustainable fairly distributed wealth, augmented by altruism.
1. Good goods and services A primary way entrepreneurs create good in the world is through making excellent products for other people It would be a bad world if everyone worked for the United Way, or making pacemakers. Shoes, hinges, yes even video games and mortgages can be morally good Ask “is this product the best use of my talents?” “Is the product a net contribute to the common good?” Is it designed to be as good as it can be?” “Have I tried to minimize as many negative potential consequences as possible?”
2. Good work: a) the development of character through entrepreneurship Much neglected aspect of human action. “The subjective dimension of work.” Just as our work changes the world, so working on the world changes use. Our character evolves from our habits. Our habits emerge from out decisions and our decision emerge from our actions. The critical question becomes “what sort of an entrepreneur do I want to be?” Leaders of character acting on good principle enhance the greater good, those who act on greed and cynicism dilute it.
2. Good work: b) the development of community through trading relationships Investing in the training and development of employees to be more productive and meaningful Finding creative ways to accommodate human needs and effectiveness in the work place How you treat supplier relationships in good times and bad can strength or damage community How you interact with the concerns of the communities that surround your business can have an impact on both the success of the business and the strength of the community Once again little of this is dependent on your for-profit or nonprofit status. Non- profits can exploit and treat people inhumanly, for profit can greatly strengthen community and thrive.
3. Good wealth Beyond pure altruism: too often the “good” of entrepreneurship is restricted to cash donations after trading is done. (Cash donations cannot undo the harm done by neglecting the first three goods.) Good wealth requires a balance of reward for labor/ creativity with the provision of a living wage to all. Good wealth is often captured by individual action but has social strings attached. Thus, wealth inequities require particular attention The creation of good wealth implies a particular solidarity with the poor. But even here, altruism is only one of a number of possible strategies.(It serves no interests to donate cash in the startup phase and then go bankrupt) But there are always problems and needs that slip through the cracks. Some problems cannot wait for entrepreneurial action.
“Good entrepreneurship” NOT “Social versus Conventional Entrepreneurship” For sure it is hard to juggle the three goods The growth phases and business realities will affect the ability to do each of the goods at any particular time But in the long run good entrepreneurship requires us to succeed in all dimensions Its just like developing a good diet….impossible to do most of the time, but deadly if you neglect in the long run The more the Good of entrepreneurship is integrated into our “daily doings” , rather than an end of year check, the more likely we are to succeed at doing good by doing well.
What does this change? How do we teach? Launched undergraduate and graduate classes on social entrepreneurship Developed class on “Faith, career and Entrepreneurship” Paper on the three goods of entrepreneurship is the philosophical backbone Experiential learning, case studies, few lectures, Developing our own local cases Students present their “entrepreneurial dreams”/ “This I Believe” at mid point
The danger of the “pretense of knowledge” “If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that … he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants…The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men's fatal striving to control society.” (Hayek, my emphasis) Social enterprise is an emerging field which needs to be carefully nurtured with humility, experimentation and in a way that protects the belief that ALL work should be GOOD work, ALL work should build character and community, and ALL work should contribute to the GREATER GOOD.