Philanthrocapitalism and the bonfire of the shibboleths

Last year Michael Edwards published his polemic on social entrepreneurship, “Just Another Emperor” and an accompanying article in Open Democracy that took the field of social entrepreneurship to task on several fronts. Below is a brief synopsis of his points:

-market-based approaches have no substantial impact on ‘social transformation’ (this term is left undefined but one can infer that he is espousing a broader view of social justice and equity)
-social enterprises are difficult to scale up and as they grow there are important trade-offs between financial goals (read: profits/financial sustainability) and social outcomes. The call for blended value falls short in his view.
-the views of social entrepreneurs toward the non-profit sector in general are dismissive and they use the non-profit sector as a sort of “straw man” where the social entrepreneurs are different in that they are “results oriented” and the non-profit sector is not
-the trend of a growing number of social enterprises in the development arena is damaging civil society (eg. declining altruistic behavior, diversion from structural change, a focus on ‘consumption’, increasing inequality between well-resourced service providers and under-resourced non-profits, co-optation of civil society’s role in social transformation, movement of the locus of collective action from institutions to individuals, dilution of discussions of power, demise of the commons, etc.)
-the entire trend is based on grotesque inequalities within capitalism itself that has created a mega-wealthy class of the likes of Bill Gates, Jeff Skoll, etc. who are the main drivers behind the trend

In late 2008 Edwards published a follow up piece in Open Democracy that responds to the chorus of critics to the first piece. He notes the fierce debate (many of the responses can be found here) and vitriol that surrounded much of the discussion. In the follow up piece we see the divisions in the development and social change communities that the rise of social entrepreneurship has entered into with the usual clusters of pros/cons with a few more astute observers entering the fray to try to move the debate into a constructive direction. Personally, I found the piece a very useful intervention and I’m left underwhelmed by those in the social entrepreneurship community who viewed this as an attack on their identities as social entrepreneurs. For that group of commenters, you might want to read some Nietzsche and understand that the last thing the social change field needs is more missionaries espousing rigid doctrinaire approaches to framing the problems of poverty and single slice solutions. Contestation and dissensus are a part of the political problem called poverty and structural inequalities. This is where Edwards is absolutely right and anyone who fails to see this fundamental fact (and I hesitate to use that word, in general) is bound to fail in the long run and is missing out on a half-century of development theory and practice that should be a prerequisite to obtaining a learner’s permit in development practice. If social entrepreneurship becomes a substitute for transparent debate over the politics of poverty and marginalization then Edwards is correct to think that the movement has become detrimental to civil society. However, I am not of the mindset that this is necessarily the case. True, there are many libertarians in the field whose views of poverty, in my mind, are ill-informed but fortunately it is an area with substantial heterodoxy despite the claims of some of its supporters and critics.

Edward’s critique of the hype around social entrepreneurship is well taken in these quarters. Find a problem of the human condition and I’ll show you business model to fix it. Well this mentality will be doomed for failure as well and reminds me of many an orthodox economist from Marxist to neoliberal throughout the last 60 years of economic development theory. That said, an overly hyped field is not a dismissed field. Part of the frustration that I sense is that we’re in a historical moment where a new book per month comes out on social entrepreneurship and few provide any major new insights other than “from sad to happy stories” in the public sphere. In the early days of the rise of social entrepreneurship these narratives could serve a purpose in boosting awareness. They now feel like a nuisance. I used one of the recent publications (“a must-read” in the eyes of many in the field) in an undergraduate business school class on “innovation and creativity” last fall and even these students found it to be more marketing than substance. The persistent attitude of many social entrepreneurs that everything that came before them was useless feeds the hubris that is only creating significant minefields for the future of the field and marginalizes the possibilities of partnerships or hybrids that could become effective interventions. While Edwards gets criticized for his over-generalizations and “straw-men” do not underestimate the length to which many social entrepreneurs use their own straw-men to make their own case. Humility, as noted in some of the comments on the debate at the Next Billion website, is one of the core features of success in my mind. In fact, the icon of the movement, Muhammad Yunus, encountered many failures and actually used many facets of standard development practice BOTH as part of Grameen’s success. The history of Grameen, in my mind (I spent a year at Grameen in 1991-92 as a Fulbright Scholar), shows how institutional building is a long process and a political one at that. History matters. There’s much more going on here than your standard enterprise.

Now, to some of the issues I have with Edward’s analysis. The overriding criticism I have of his polemic is the need for a polemic in the first place. He has trapped himself in a series of dyads that actually short changes many of the points he wants to make. We don’t live in an either/or world. Michel Foucault once claimed that no new knowledge ever arose from a polemic. This is why the shibboleths of the left and right are crumbling everyday. The notion that profit=bad, business vs civil society, individuals vs institutions, etc. these constructions permeate his entire analysis and are not much help in letting us understand what is going on (and anyone who thinks they can answer this question in a straightforward way fundamentally does not understand social change). A great deal of political theory, social sciences, humanities work being done in academia today would view this debate as something out of the late 1970s at best. Traditional philanthropy vs. the philanthrocapitalists? Where did MacArthur Foundation, Ford, Rockefeller and First World powers who created the development apparatus of the post-Marshall Plan come from? The source of funding is not really fundamentally different. Hypercapitalism has merely enabled greater accumulation by the likes of Gates. This is one issue. Separate, but never entirely separate is the modes and mechanisms of social entrepreneurship.

Regarding the encroachment of market logics to every sphere of life and the detrimental effect this has on civil society–I am somewhat sympathetic to this issue and view this as an important topic of ethico-politics of the moment. By framing poverty as something entrepreneurship must ‘fix’ we risk framing the poor into the worthy/unworthy ie. entrepreneurial poor vs. the helpless. I’ve written elsewhere on this blog about the language of the ‘consumer’, its historicity and effects in healthcare. There is a great danger of occluding power relationships that are central in maintaining social inequalities and every social entrepreneur needs to be aware of these dangers. In fact, we might want to add a new dimension to business plans that forces social entrepreneurs to analyze this impact before funding them.

I also find the ‘civil society’ debate rather dated and sloppy. Who is in civil society and who is not? Are social entrepreneurs not members of civil society once they become entrepreneurs? One of the shibboleths of the left is that this thing called civil society, this imagined community, is always a force for good against the state and commercial interests. But we’ve been witnessing the changing of the boundaries of institutions now for 2-3 decades, Bush Administration aside. The state is not clearly bounded either. Just read Francois Bayart’s “The State in Africa. The Politics of the Belly (the politics of the belly is a colloquial expression in parts of Africa of how the goat tethered to the stake eats everything around the stake, here the stake is the state and the networks that feed off of state resources, ie. extensions into civil society). Remember, civil society in Rwanda in 1994 played a major part in the genocide. Let’s not romanticize the role of actually existing civil societies. I think the debate has a long way to go in getting to a place where we can read new insights into the nature of this thing called ‘development’ or poverty alleviation. Furthermore, is it written in stone that commerce cannot play any constructive role in social justice? It will never be the only factor but what is implied in Edward’s case is that it cannot play a constructive role in surfacing power relations and the factors that can influence social transformation. This could be an interesting new area for social entrepreneurs to think about–policy entrepreneurship and power/politics.

In the mid-1990s there was a great deal of work based on post-structuralist critiques of development. The two most influential pieces were by Arturo Escobar and James Ferguson. These works would actually take both of the camps spoken about here to task. While the academic debates have moved on in many ways, some of the key criticisms of the development enterprise are still relevant despite their relative obscurity in the development practitioner debates. It might be useful to bring some of the issues around development and power, politics and ethics, framing of problems into the space between non-profits and market solutions and look for fertile grounds to innovate. We live in a moment when the institutions for making markets are in a profound state of crisis. ‘Credit’, genealogically linked to the Latin “credere” (to trust) is in short supply and there are great hopes that social businesses and social entrepreneurship can provide another path. Simultaneously, the “market” increasingly looks like the problem rather than the solution that many in the social enterprise field claim. Many in the non-profit world feel that they’ve had to become more like the business world than they care, others have made this transition and have seen substantial benefits for their clients and their institutions. I’m uneasy adopting any sort of ideological position but know that we must try to understand what is going on before we try to make general statements about either approach. Boosterism for social enterprises has become rather borish of late. This does not mean that there aren’t substantially interesting options and futures in the field.

From this entire debate I sense the beginnings of a different future emerging between the nooks and crannies of the polemics that Edwards and his interlocutors discussed above. New forms of institutions can emerge with different forms of market institutions, political discourses can open up new ways of intervening in the lives of the poor. Face it, that’s what both sides are doing. Throughout this blog I’ve spoken about new commons and cooperation. Edwards views the commons in stark juxtaposition with commercial interests. This is unfortunate, and uninformed. The commons are an emerging metaphor for the place between public and private and many private sector interests, just as civil society, can benefit from them. New business models are emerging off of commons. We’re going to have to get rid of some of this binary thought (a la Nietzsche in “Beyond Good and Evil”, get it?) and create new types of partnerships, commons and forms of cooperation to meet the magnitude of the problems we currently face. As the credibility of mainstream economists plummets with the market there are opportunities here to rethink the project of “economics” through many of the issues above but wrapped around the essential features of the “knowledge society” and the power of networks, cooperation and commons. Let’s not lose the opportunity by limiting ourselves by polemics.


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